Zespri ERA fraud case drags on

Zespri CEO Lain Jager. Photo/file

Zespri's chief executive Lain Jager says he wants direct clarification from former China manager Joseph Yu on the customs fraud issues that led to him being jailed for five years in China before the kiwifruit company will discuss compensation with him.

"Joseph maintains that his conviction was solely a consequence of his employment by Zespri and that he had done nothing wrong," Mr Jager told the Bay of Plenty Times Weekend in an exclusive interview, which also included insights into the ongoing Serious Fraud Office investigation of Zespri (see sidebar).

Mr Yu brought a case against Zespri with the Employment Relations Authority (ERA) late last year over whether he was unjustifiably disadvantaged during his employment, breaches of duties owed to him by Zespri, and whether he had been unjustifiably dismissed in 2014. The case was removed to the Employment Court with the consent of both parties earlier this month.

I doubt it will be resolved in the Employment Court before he gets out of jail.

Philip Skelton QC

Mr Jager said Zespri respected that it was Mr Yu's prerogative to take the action and described the case as challenging.

"I am not able to address the matter of compensation without first meeting with Joseph to gain clarity around some issues that have come to my attention relating to historical matters in China," said Mr Jager, who acknowledged this was unlikely to happen before Mr Yu completed serving his term, given the difficulty of accessing prisoners in China's prison system.

"It's important to say that I am not accusing Joseph of wrong-doing, simply that there are some issues that require clarification before the issue of compensation can be considered," he said.

"I have asked to see him. But I have also suggested that it might be that the issue of compensation can be left until Joseph is out of jail so we can work through it."

Philip Skelton, QC, the barrister representing Mr Yu together with Auckland law firm Anderson Creagh Lai, told the Weekend he had no idea when a fixture would be allocated to consider Mr Yu's substantive hearing.

"I doubt it will be resolved in the Employment Court before he gets out of jail," said Mr Skelton.

"It will be a little bit difficult to have the trial in New Zealand without Mr Yu being able to give evidence."

However, the nature of what may become crucial evidence in the matter may be clarified within the next couple of months. The ERA made a direction last December that Mr Yu's work laptop be delivered up to the authority by the Shanghai Anti- Smuggling Bureau, with counsel for Zespri and Mr Yu having a right to inspect what was on the computer.

Zespri appealed the order, claiming the laptop should be delivered up to the company.

The laptop appeal has been set down for a separate hearing on June 22 by Employment Court chief judge Graeme Colgan. Mr Skelton expected a judgement on that issue within two months at the latest, adding that he understood the Chinese authorities were willing to comply with the ruling.

"Mr Yu is very keen to get his computer back because there are some key documents there which he believes will support his case." Mr Skelton said his client's case was that he believed what was happening in China was lawful.

Mr Jager said that Zespri had continued to employ Mr Yu and supported his legal costs as he defended himself in the Chinese court system.

"After two years and once his legal appeals were exhausted, Zespri terminated his employment on the grounds that his employment had been frustrated by his imprisonment."