OSI Group to appeal Chinese court's verdict

Updated: 2016-02-02 09:43

By JACK FREIFELDER in New York(China Daily USA)

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US food purveyor OSI has called "unjust" a Chinese court's fines against it and prison sentences for 10 of its employees over allegations of giving expired meat products to US-based fast-food restaurants in China.

The Shanghai Jiading People’s Court on Monday fined two domestic subsidiaries of Aurora, Illinois-based OSI Group LLC up to 2.4 million yuan ($365,000) and ordered the prison sentences.

The court also said that a general manager at OSI China, Yang Liqun, would be sentenced to three years in prison. Nine other people receive sentences between 19 and 32 months and also have to pay fines, the court said, adding that the punishments were softer due to cooperation from the defendants.

OSI said in a statement e-mailed to China Daily on Monday that it plans to appeal the decision, saying it was the target of a smear campaign.

"The verdict is inconsistent with the facts and evidence that were presented in the court proceedings," to company said. "As such, OSI is forced to consider an appeal through all legal channels in order to eventually be granted a just, evidence‐based verdict as merited by the facts of the case."

OSI also said it plans to take legal action against Dragon TV, the state-run television station that aired a July 2014 report initiating the investigation. The company said in its statement that Dragon TV "made false and incomplete accusations that ignored facts and Chinese law".

The court said Yang and other workers at OSI's China units had reused products from returned or canceled orders, meaning some unapproved products had entered the market.

In July 2014, McDonald's and Yum Brands Inc (parent company for KFC, Pizza Hut and Taco Bell), cut ties with Shanghai Husi Food Co Ltd, a unit of OSI, over the sale of expired meat to some of their restaurants in China.

A number of other companies soon followed suit, and six of OSI China's employees were arrested.

OSI's troubles began when local media had documented employers at Shanghai Husi - which provides food to McDonald's, KFC, Pizza Hut and Starbucks - forging production dates and using expired meat.

The company then ceased operations at the Shanghai plant to work with authorities on an investigation into the food quality. It changed the structure and management of the China division, incorporating the branch into the US rather than it operating as a separate entity.