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Man Claims He Was Entitled To Divert Company Money

Fuseworks Media
Fuseworks Media

By Craig Jeffrey for NZPA

New Plymouth, Nov 24 NZPA - The sacked boss of the Pacific Natural Gut Company (PNG) says the $130,000 he is accused of defrauding from the business is "a drop in the bucket compared to what they owe me".

In New Plymouth District Court today, Frederick Schwacke said in a police interview he was entitled to buy a new car, draw unpaid wages and redirect PNG money into his majority-owned shelf company, Serosa NZ Ltd.

The 18 fraud charges stem from an acrimonious split with PNG's German parent company, Pacific Entermark Gmbh in 2006.

In 2002 and under Schwacke's leadership, PNG, landed New Zealand's prestigious Exporter of the Year award.

The company was hailed as the best tennis string manufacturer in the world.

But a handshake deal, when Schwacke joined the company in the 1990s, turned sour, when he did not receive a promised 25 percent stake in PNG following the company's award-winning performance.

The company almost went broke as Schwacke began diverting PNG money into Serosa and failed to pay PNG's raw material bill.

Meat processing companies of the beef gut lining used in the manufacture of the strings, refused to continue to provide the product until a $200,000 bill was paid.

Schwacke maintained he had authorisation to conduct the business as he saw fit.

Counsel Susan Hughes QC called for Schwacke to be discharged as the company accountant was kept informed of where funds were directed and Schwacke had the right to operate the company and was its managing director.

Pacific Entermark's owner, Joachim Schwartz, has accused Schwacke of deliberately trying to bankrupt PNG and take its business for himself.

Much of today's defended hearing, before Judge David Ongley, was taken up by a three-hour long police interview with Schwacke.

In the interview Schwacke appeared stunned that he was being spoken to about any wrong doing.

He denied any intention to send PNG to the wall and was attempting to expand its business into other markets, using Serosa as its vehicle.

Schwacke said he only began drawing money he was owed when payments became erratic in early 2005.

Bank transfers of thousands of dollars to his account in the US were to take care of his commitments at home.

Schwacke also explained buying a Lexus car as an essential purchase, as he needed to travel widely to expand the business.

Accused of trying to break PNG to get back at the owners for not respecting his achievements or honouring his share of the company, Schwacke replied, "I don't do that shit."

Judge Ongley is expected to hand down his decision tomorrow. NZPA WGT jef mgr kn

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