A prosecution witness in the Powdergate legal action told the depositions hearing an "option of fabricating documents" for a June 2001 audit was discussed - theoretically - and then discarded.
Sandy Williams worked as a logistics co-ordinator for Cottee Dairy Products, an Australian subsidiary of Kiwi Group.
Reading her brief ofevidence to the district court in Auckland yesterday, she outlined the processes involved in ordering, shipping and packaging New Zealand milk powder products.
Williams said New Zealand product was warehoused in Australia and sometimes blended with Australian product, relabelled (sometimes as Made in Australia) and shipped on to overseas customers.
She said she became concerned when Kiwi wanted to "clear 3000 tonnes of excess stock" and raised this with her employer, William Cottee - one of the seven accused. She was worried that the Australian production of the particular product was not large enough to absorb the New Zealand portion while still being labelled Australian made.
Other witnesses heard yesterday were William McKenzie, of North Harbour Customs Agents, which has imported and exported product for SPD (an intermediary company of which one of the accused, Terence Walter, was sole director and shareholder) since 1997 and Theresa Morrissey from the New Zealand Customs Service.
Her evidence was interrupted for more information to be collated.
Seven defendants - Paul Marra, Malcolm McCowan, Terence Walter, William Cottee, William Winchester, Stephen Wackrow and Sean Miller - are charged with conspiring to defraud the Ministry of Agriculture and Forestry, NZ Customs, the Dairy Board and Kiwi Co-operative Dairies.
The allegation is that $45 million of premium milk powder was illegally exported by Kiwi Co-operative Dairies' employees and subcontractors on 210 occasions between January 1997 and October 2001.
Depositions are set down for the rest of the month.
