Isidoro Quiroga, the former head of Puerto Varas, Chile-based Australis Seafoods, has gone on the offensive after being accused of fraud by the company's new ownership group.
Australis was sold to Chinese foodservice giant Joyvio in 2018 for USD 921 million (EUR 850 million). In March 2023, Joyvio announced a plan to file a USD 1.22 billion (EUR 1.13 billion) lawsuit against Quiroga, seeking the return of its investment plus USD 300 million (EUR 274 million) in damages. Joyvio accused Quiroga of withholding information regarding overproduction at several of the company’s farming centers during the acquisition’s due diligence phase.
Now, Quiroga said he has hired a law firm in China to "pursue and make clear" to the Shenzhen Stock Exchange and investors "the lack of truth" coming from Joyvio and its board, chaired by Shaopeng Chen, Chilean newspaper El Mercurio reported.
The legal team representing Quiroga’s investment firm, Asesoría e Inversiones Benjamín, has unveiled documents they said completely refute Joyvio’s claim it was unaware of any overproduction. The information stems from a labor lawsuit filed by Santiago Garretón, a former administration and finance manager at Australis who was fired by the board of directors in 2022. The documents provided to SeafoodSource include:
- An email in February 2021 from Australis’s then-CEO Ricardo Misraji, who informs Joyvio executives that in 2018 there was a notification from Chile's Superintendency of the Environment (SMA) about overproduction. In the email, Misraji said it was a “political issue” and that in the past the harvests of the entire industry have been “poorly controlled, or not controlled at all.”
- An email from December 2021, in which Joyvio Director Vincent Dong reveals he has discussed the problem of overproduction and other matters with board member Qing Tong Zhou and Shaopeng Chen. He asked Misraji to increase production to 95,000 metric tons (MT) in 2022, and sales up to 97,000 MT, “generating more liquidity.” The harvest limit for that year was 72,000 MT.
- A January 2022 email in which the board discusses a proposal that production be pushed up to 104,000 MT per year by 2023-2024.
- A February 2022 email to the board in which Misraji says the political situation is “hostile” following the election of Chile President Gabriel Boric, predicting “stricter” inspections for farmers to comply with the law. He says that one option is to “continue working as we have done so far, without adjusting the maximum authorized production by farm site,” but warning Australis could face fines of up to USD 5 million (EUR 4.6 million) per site or even lose its licenses.
- In a March 2022 email, Misraji responded to a board inquiry as to why the company's capex had expanded. “This company was acquired producing 60,000 MT a year (if I remember well) and the instruction was to make it grow to 100,000 MT or more. Finally, during the pandemic we made almost 110,000 MT … That includes a lot of capex,” he responded.
Several other emails alluded to or spoke directly to overproduction, which Quiroga's legal team says is proof that Joyvio, its executives, and the company's board of directors were all aware of the infractions.
Quiroga has asked the judge overseeing the case, from the Seventh Civil Court of Santiago, Australis CEO Andrés Lyon, Joyvio Chair Shaopeng Chen, and Australis President Yin Tang, be ordered to answer questions prepared by his defense team. The court accepted this request and ordered the three to appear in court on 19, 21, and 26 April, respectively. Quiroga also filed a libel suit against the Lyon and Chen.
Since 2021, under Boric's leadership, the Chilean government has stepped up its regulatory oversight of overproduction throughout the country’s USD 6.6 billion (EUR 6.1 billion) a year salmon sector. The SMA has 13 sanctioning processes pending against Australis alone for exceeding the authorized production limits, more than double the amount filed against salmon farmer Nova Austral.
Photo courtesy of Chile’s Superintendency of the Environment (Superintendencia del Medio Ambiente)
