A "consummate scientist", who made a critical discovery for tennis string manufacture, walked free from the New Plymouth District Court yesterday.
Frederick Schwacke, former managing director of the Pacific Natural Gut string company (PNG), had all 18 counts of fraud against him dismissed when he appeared before Judge
David Ongley.
Schwacke was fired from PNG in 2006, when German parent company Pacific Entermark GmbH suspected he was intentionally sending the company broke, with a view to acquiring its business for himself, the court was told.
Schwacke had been credited with turning PNG's fortunes around during the 1990s, when his research discovered a new method of processing beef gut lining (Serosa) into world class tennis strings.
Under Schwacke's leadership, Pacific Natural Gut tennis strings became recognised as the best gut strings in the world.
PNG had been in danger of going broke until Schwacke led the company to win New Zealand's Exporter of the Year award in 2002.
But a lack of recognition by the German owners of Schwacke's achievements and its failure to provide a 25 per cent share in PNG soured their relationship.
The charges laid against Schwacke related to his diversion of PNG funds to shelf company, Serosa NZ.
Company owner Joachim Schwarz said Schwacke never had authorisation to divert any of PNG's money into Serosa.
Schwacke said Serosa was created with the full knowledge of Schwarz and it was formed to split PNG's tennis string production business from its raw material harvesting operation.
Schwarz was concerned Serosa could end up being in competition to PNG, as most of its money was going into Serosa and PNG's raw material bill was approaching $200,000.
Accountant Brian Busing had previously said he had become concerned Schwacke was trying to gain his shareholding in the company by creating his majority interest in Serosa.
Schwacke's counsel, Susan Hughes, QC, argued her client had every right to run the business as he saw fit, as he was its managing director.
Ms Hughes said any of Schwacke's spending had never been hidden and was open to scrutiny. She also said Pacific Entermark's only interest in what PNG did was in its bottom line.
- NZPA
