Farmers lose out after Wagyu company ‘diverts’ funds

Saturday, 6 July 2024

At least 140 farmers and suppliers are owed $11m after a wagyu management business diverted money meant for creditors.

A wagyu business has left 140 farmers and suppliers about $11 million out of pocket after diverting money to other projects including a massive wagyu cattle barn near Rakaia.

As reported on Thursday, Canterbury-based New Zealand Wagyu Co, run by director and shareholder Arato Tsujino, had gone bust, along with six other linked companies, on June 28.

In a report released on Friday, liquidator Brenton Hunt said the business owed $10.4m to unsecured creditors including farmers and suppliers around the country. It managed about 30,000 cattle on about 50 farms.

The report said New Zealand Wagyu and associated companies had “in recent years invested in building large feeding sheds, rearing of calves, an abattoir, a butchery, a commercial kitchen, jerky business and some hospitality businesses”.

Former All Black Andy Ellis with director and shareholder Arato Tsujino. Ellis promoted Wagyu beef with Tsujino at food shows, but said he had no financial interest or involvement in any of Tsujino’s companies.

“From approximately March 2024 onwards, New Zealand Wagyu Co fell into substantial arrears with farmers and suppliers, despite receiving prepayment of all farmers and suppliers' costs from the owner of the stock.

“As a result of discovering these discrepancies, the owner of the stock (SFJ Holdings) ceased further payments to New Zealand Wagyu Co and determined instead to pay farmers and suppliers directly from 1 June 2024.”

New Zealand Wagyu Co. Limited has gone into liquidation but still owns this giant barn for intensive farming in Rakaia.

SFJ Holdings could not be reached for comment before deadline.

Former All Black Andy Ellis, who has promoted Wagyu beef with Tsujino at food shows, said he had no financial interest or involvement in any of Tsujino’s companies and felt for the farmers and suppliers.

“It is still a fantastic product,” he said.

Waygu cattle come from specially bred cattle that spend most of their lives in purpose-built barns fed by grain.

Tsujino said he began investing in the other businesses including barns when the wagyu beef market was buoyant and he felt confident farmers and suppliers providing services to his companies would be paid.

“The market was pretty good, so we estimated that we could make sure everything could be paid out comfortably.”

Due to a downturn in the market, he ran out of money to both keep his new businesses afloat and pay suppliers like farmers.

Environment Canterbury issued another of Tsujino’s companies a consent for the Rakaia barn on March 19. It allows the company, which is not in liquidation, to house a maximum of 4000 cattle in six composting barns.

Some of the prepaid money had gone into the barn business which would continue “as usual”, Tsujino said.

“Setting up the barn and finishing cattle, there was a really large cost to it … My aim was to perform well as a management company and I was quite confident that we were moving quite well as a business and making profits.”

There are still cattle being housed in the Rakaia barn as Tsujino said operations there would continue as usual.

Tsujino said he intended paying the farmers and suppliers back in due time.

“Yeah, we are working through it as much as possible at the moment.”

One large North Island farm business, which is owed nearly $2m and asked not to be named for legal reasons, said it had grazed SFJ Foods wagyu cattle on their leased farms until March this year without being paid by Tsujino.

The failure to pay meant the business had to “give up” its leases and return the cattle to SFJ Foods, a spokesman said. Families and staff had been badly affected, he said.

The liquidator’s report said New Zealand Wagyu Co owed staff $189,000 in wages and holiday pay, $915,000 in GST and $10.4m to unsecured creditors.