Cofco-Nidera: Court to rule on art, property and bank account seizure

A Dutch court will next week rule on whether Cofco International acted legally when it seized the bank accounts, art collections and property belonging to the former owners of Nidera – a company it bought outright in 2017 – amid allegations of improper accounting.

China state-owned agribusiness Cofco has accused the three families that owned Nidera of accounting irregularities and is seeking damages worth $500 million.

The families deny the claim.

Cofco International bought Dutch-based Nidera in two stages in 2014 and 2017 for $1.8 billion, with the then CEO of Cofco’s grain business, Matt Jansen, describing the deals as "transformative" for Cofco.

Eighteen months on, the sheen has come off the acquisition with Cofco seeking damages from two companies owned by the former owners of Nidera – members of the Salzer Levi, Drake and Mayer-Wolf families – in a dispute that is likely to drag on for months, if not years.

"The families just want to get rid of the seizure," Mr. Biesmeijer from the Rotterdam Court told ArgiCensus.

“The ruling on the actual damages will be handled later and run up to the hundreds of millions," he added.

The case regards alleged accounting irregularities Cofco said it uncovered in Nidera’s Brazilian subsidiary, claiming the owners had overstated the advance payment and futures contract assets in the balance sheet by $166 million, which led to a net loss of $110 million.

As a result, Cofco claims Nidera’s projected profits were overvalued by 75%, which led to an overestimation of Nidera’s value by $500 million when Cofco bought the first 51% of the company in 2014 for $1.3 billion.

The Rotterdam arm of the Nidera group was in 2015 also embroiled in a $200 million accounting scandal involving unauthorised biofuels trades.

Despite this, in February 2017 the Cofco purchased the remaining 49% of Nidera for $448 million.

This case at the Rotterdam tribunal is a smaller part of an arbitration case at the International Chamber of Commerce, which is expected to run for months or years with a hearing scheduled in early 2019 to listen to experts of both sides.

The Rotterdam court is due to rule on March 28.