By PHILIPPA STEVENSON
Two New Zealand-based Kiwi Dairies executives have been suspended while investigations continue into the "Powdergate" illegal exporting scandal.
Kiwi's successor, Fonterra, yesterday confirmed the suspensions but declined to name the pair.
One executive is understood to have requested the stand-down as the scandal mounts over the illegal exporting of
milk protein concentrates said to be worth $39 million.
The product was manufactured by Kiwi, illegally exported by Tauranga-registered company SPD - whose owner, Terry Walter, is employed by a Kiwi subsidiary - and was then bought by Kiwi's Australian subsidiary, Cottee Dairy Products.
Cottee executive and director Ross Cottee has been sacked over the matter.
Fonterra spokesman Matthew Hooton said the suspended executives were at home on full pay for an undefined period.
The company has brought in former police detective and now private investigator John Hughes to help with the investigation.
Meanwhile, a Ministry of Agriculture and Forestry senior investigator, Brett Subritzky, said MAF, charged with policing breaches of Dairy Board export rules, had not "kicked off an investigation as such."
"We've been doing background inquiries. That decision [to investigate] hasn't been made."
Australian authorities including Australian Customs are investigating Cottee for illegal exports from Australia.
Fonterra shareholders council chairman John Wilson said yesterday that the issue was hanging over the industry.
"The questions shareholders, and all stakeholders have got, are around the integrity of Fonterra."
The council was happy that company chairman John Roadley had given assurances that the board would investigate the allegations "without fear or favour."
Dairy Farmers of NZ chairman Charlie Pedersen said it was widely believed among farmers that all companies were exporting "round the Dairy Board" to get better prices.
As a result no one wanted to "get all moralistic about it".
However, the Kiwi incident under investigation was "of some order greater than anyone expected was going on."
Farmers were relieved the old system had gone with deregulation of the industry and the formation of Fonterra. If there had been wrongdoing by or gain to individuals, farmers would be concerned if those people became employees.
"No one's going to put up with someone who was perhaps playing fast and loose with our product and our money," Mr Pedersen said.
He hoped that "Powdergate" was a one-off occurrence and had faith in the elected directors to "make bloody sure that it is a one-off and that it doesn't ever happen again."
