China court fines OSI, jails employees over food safety scandal

Mon Feb 1, 2016 8:46pm EST
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By Adam Jourdan

SHANGHAI (Reuters) - A Chinese court has fined two domestic units of U.S. food supplier OSI Group [OSIGP.UL] up to 2.4 million yuan ($364,875) and handed prison sentences to 10 of its employees over allegations it reused returned food products to avoid losses.

The verdict marks the end of a long-running probe into OSI after a safety scandal in 2014 that hit fast-food giants it supplied - McDonald's Corp (MCD.N: Quote) and Yum Brands Inc (YUM.N: Quote), owner of KFC, Pizza Hut and Taco Bell in China.

The Shanghai Jiading People's Court said in a statement on Monday that Yang Liqun, a general manager at OSI China, would be sentenced to three years in prison and deported.

It wasn't clear whether Yang, an Australian citizen, would serve jail time in China or be immediately deported.

Australian authorities said they were assisting a citizen arrested in Shanghai, but did not mention Yang by name.

"The Department of Foreign Affairs and Trade is providing consular assistance, in accordance with the Consular Services Charter, to an Australian arrested in Shanghai," a spokeswoman said in an emailed statement to Reuters when asked about the case.

OSI has criticized the handling of its case by the local food regulator - a rare act in China, where foreign firms steer clear of any public criticism of the authorities.

The firm said on Monday that the verdict, which follows a December trial behind closed doors, was unjust.   Continued...

A security personnel stands guard in front of an OSI's food processing plants in Langfang, Hebei province, July 23, 2014.  REUTERS/Paul Carsten