Australis Seafoods owner Joyvio has officially filed a USD 1.22 billion (EUR 1.12 billion) lawsuit against the company's former owner, Isidoro Quiroga.
In response, Quiroga's laywers called the suit an “extortion scheme" in a press statement.
Joyvio, a Chinese foodservice company with CNY 5.5 billion (USD 767 million, EUR 711 million) in sales and CNY 1.1 billion (USD 153.5 million, EUR 142.3 million) in losses in 2022, announced its plan to file suit in March 2023, claiming Quiroga and his associates knowingly withheld information regarding overproduction at Australis Seafood, a major producer of farmed Atlantic salmon, which it acquired in 2018. Joyvio said it would not have paid USD 921 million (EUR 852 million) for Australis had it known the full details of its overproduction, which it said Quiroga knew about and deliberately hid from both Joyvio and Chilean authorities.
Joyvio's lawsuit alleges Quiroga engaged in one of the “greatest frauds in the history of Chile.” According to Joyvio, the fraud materialized through “a set of fraudulent acts of a gigantic patrimonial magnitude, which constitute a sophisticated and complex scheme” that Quiroga and his associates “meticulously developed over several years.”
In the 77-page lawsuit, Joyvio is requesting USD 921 million (EUR 852 million), plus USD 300 million (EUR 277 million) in damages in restitution for the alleged fraud.
According to Joyvio’s lawyer Gabriel Zaliasnik, “a surprising series of emails” exchanged by Quiroga and his “iron circle”– made up of his sisters, Maria Victoria and Maria Dolores Quiroga; his sons, Isidoro and Benjamin Quiroga Moreno; former Australis Board Chair Martin Guiloff Salvador; former Australis Planning and Administration of Finance Manager Santiago Garreton Sanchez; and former Australis Director Luis Filipe Correa – show the group recognized Australis’s overproduction problem and “deliberately circumvented environmental regulations to commit their crime.”
The complaint alleges deliberate overproduction helped inflate Australis' salmon-production numbers, a “fundamental element” in the negotiations on the company's valuation.
“The structure of costs, assets, and results of Australis presented to Joyvio was completely false and/or adulterated,” the complaint said.
Soon after the lawsuit was filed, the Asesorías e Inversiones Benjamín, the law firm representing Quiroga, called the new complaint evidence that Joyvio’s “extortion scheme has not yielded results.”
Joyvio filed the suit only after four years of pressuring Quiroga to “make public opinion believe it was the victim of a scam, when the case history shows the opposite," the statement said.
Quiroga said he hired a law firm in China to fight back against Joyvio’s accusations, and Asesorías e Inversiones Benjamín unveiled its own documents in April 2023 which it said completely refute Joyvio’s claims it was unaware of the overproduction before it purchased Australis.
The law firm’s latest statement reiterated that Joyvio had “all the information on Australis” at its disposal during the due diligence process.
“According to the Joyvio Group, the Australis sellers would have hidden information in the sales process. This is completely false and the Joyvio Group knows it,” the law office statement reads.
Australis provided Joyvio with over 12,000 legal, financial, and technical documents covering the production of each farming center and the authorized production quantities of each center.
The law firm said Joyvio announced it would file its lawsuit in March, then took until June to do so, because it was forced to “rewrite its complaint for fraud because it was faced with the harsh reality of the facts, which simply do not fit with its theory of the case.”
“On 26 March, the Joyvio Group announced with great fanfare in the press that it would file a lawsuit for fraud in the ‘next few days,’” it said. “However, the Joyvio Group took more than two months to present the announced lawsuit. Said delay is not accidental and is explained by the ‘reality check’ experienced by the Joyvio Group.”
Existing documents, the law firm said, showed that Joyvio was fully informed of instances of overproduction through multiple traceable interactions, and that 90 percent of the overproduction alleged by the group were harvested after the public offer for the acquisition of shares – “therefore Australis was under the control of the complainant.”
“In view of the foregoing, this case will only be remembered as one of the most boisterous and unsuccessful extortion schemes in the history of Chile,” Asesorías e Inversiones Benjamín said.
Photo courtesy of Joyvio Foods
