A failed initial public stock offering of a Chinese tuna firm revealed that the company planned to circumvent international conservation limits on the threatened fish–by simply ignoring them, reports Shannon Service in our latest story “Tuna firm’s bungled IPO exposes China’s flouting of global fishing rules,” online today The Guardian.
“The failed IPO is the work of China Tuna Industry Group, which from 2011 to 2013 was the largest Chinese supplier of premium tuna to Japan’s hungry sushi market,” reports Service. “Over 70% of its $62 million in annual sales are made to a single company, Toyo Reizo, a subsidiary of Japan’s Mitsubishi Corp. Hoping to raise over $100 million to expand this profitable operation, China Tuna filed draft documents for the IPO this past June.”
China Tuna relies upon “nearly threatened” Yellowfin tuna as well as Bigeye, which according to Pacific Islands Forum Fisheries Agency is seriously overfished. And yet in its draft IPO, the corporation used outdated information to rate Bigeye tuna at a “healthy level of abundance” and “not overfished.”
The document went on to state that China doesn’t have a record of enforcement for fishing limits, that boats are exempt from limits set by the Regional Fisheries Management Organizations, and that even if catch limits applied, they would not be enforced by regional fisheries organizations because there are no sanctions in place. After Greenpeace complained to the Hong Kong Stock Exchange that the company was misleading potential investors by overestimating fish stocks and ignoring environmental concerns, China Tuna suspended the public offering.
Service learned from the draft IPO document that the company operates Japanese and Chinese vessels and is registered in the Cayman Islands. Its primary shareholders are Li Li, a 24-year-old woman with a passport from St. Kitts, and her father, Li Zhenyu. The story details Service’s attempt to find the China Tuna offices and a responsible party who could speak for the organization, which proved nearly impossible.
“I have yet to speak with anyone who admits to working directly for China Tuna. But the firm’s combination of bravado and impenetrable corporate structure offer clues as to why the health of the oceans is in freefall,” writes Service. “China has told the world that from 2000 to 2011 it caught 368,000 tons of fish annually in international waters. But as The Wall Street Journal reported in 2012, the European Commission estimates the catch at closer to 4.6mn tons, or 12 times greater.”
The story further reveals a lack of oversight of the fishing industry by China’s Bureau of Fisheries, which issued fishing licenses to China Tuna without realizing that it is a Cayman Islands company run by a foreign national.