The Financial Markets Authority (FMA) has dismissed complaints about the massive losses Fonterra incurred from writing down the value of its Chinese investments.
The financial performance of the Chinese assets contributed to Fonterra reporting significant losses in 2019. (File image) Photo: RNZ / Rebekah Parsons-King
It said an investigation had shown nothing to justify any action after the writedown of $674 million in the Chinese assets in 2019.
"The FMA did not find evidence to support regulatory action, including litigation, under the Financial Markets Conduct Act," the FMA said in a statement.
The complaint was brought by a Fonterra shareholder, Colin Armer.
Fonterra wrote off more than half of the original $754m investment in its 2015 joint venture partner Beingmate, resulting in a loss of $474m. It also wrote off about $200m from its valuation of fresh milk producer China Farms.
The financial performance of the Chinese assets contributed to Fonterra reporting significant losses in 2019.
Fonterra has since sold its holding in Beingmate, and all but one of its China farms, with last month's sale of two joint venture farms for $US115.5m ($163.4m).
The FMA said it had also reviewed the valuations of Beingmate and China Farms Fonterra used in its earlier financial statements.
"In the context of these various inquiries, the FMA has spent considerable time seeking to assess the reasonableness and supportability of forecasts used, and assumptions applied, in valuing parts of Fonterra's business and related disclosures," the FMA said.
It declined any further comment, but reminded all company directors they were primarily responsible for ensuring that quality financial statements and information were prepared.
In a brief response, Fonterra chief financial officer Marc Rivers said: "We share the FMA's objectives of providing transparency and respect their role in ensuring investors are fully informed."