Norway once held 80 percent of China's salmon market.
That was before a certain Nobel Peace Prize.
The Nobel Committee, based in Oslo, thought to extend its 2010 award to a Chinese dissident and critic of the Chinese government.
The government responded by quietly shutting Norweigan salmon out of the Chinese market. Salmon shipments fell 70 percent between 2011 and 2017, when Norway formally apologized, tacitly agreeing it would never happen again.
It hasn't. Norway has climbed back to 49 percent market share, according to the United Nations.
And the Chinese government has a new salmon sparring partne: Chile, which represented 22 percent of China's imports last year, market share built up during the Norway-China freeze.
Chinese government-owned Legend Holdings is suing the former owner of Chile's fourth-largest salmon farmer, Australis, for which it paid some $900 million in 2019 through Legend's food investment investment vehicle, Joyvio Group.
Joyvio and Legend, which owns Chinese computer and software giant Lenovo, claim former Australis owner, Chilean entrepreneur, Isidoro Quiroga, had been producing salmon in breach of Chilean regulatory limits, and that he hid this fact during their due diligence.
He said the Legend executives who did the deal were fully aware of this, and that they continued to "overproduce" themselves after taking control of Australis, increasing salmon production by some 50 percent, to 100,000 tonnes per year in 2020.
Two years after Legend's purchase of Australis, Chilean regulators began cracking down on overproduction. Australis, and all Chilean salmon producers, are now producing less.
Australis, which recorded revenue of $399 million and profit of $73 million in 2018 as an independent company, according to public loan documents, is delivering profits for Legend and Joyvio. But Quiroga says these profits don't amount to enough.
Now the Chinese governrment is suing him for all the money it paid for his company, and more.
"A Chilean company with sound corporate governance"
When Joyvio closed on its purchase of Australis, it touted the company's' reputation and leadership team.
“[Australis] is a Chilean company with sound corporate governance, an outstanding management team, leading performance indicators in the industry, a great reputation, and strong profitability," it said.
It took four years for Legend executive Shaopeng Chen to change his mind. He's now claiming Quiroga led "a systematic policy of overproduction and its concealment” and is demanding Australis' former owner pay $1.2 billion in damages, more than his purchase price.
Chen and Joyvio are suing Quiroga in Delaware, Florida, in the UK as well as in Chile.
Quiroga says Chen's accusations are "falsehoods and slander to try to solve their financial and business management problems."
“Joyvio went scandalously into debt to buy Australis, based on profit expectations that were impossible for any company to meet,” Quiroga said.
He said Chen sued him because "the debt pressure was so great."
According to Aiddata.org, Joyvio borrowed $450 million from a syndicate of banks to fund the Australis purchase.
Last year, a Legend Holdings-controlled investment unit agreed to waive $250 million in Joyvio debt that funded the Australis purchase and subsequent operations. It cited "significant losses due to factors such as the pandemic, the international geopolitical situation and the significant increase in U.S. interest rates" as reasons for the waiver.
Joyvio, founded in 2012 as Wanfu Biotechnology Hunan Agricultural Development Co., is sensitive to fraud claims.
In 2014, the firm was convicted of securities fraud in China "for forging sales figures in its initial public offering prospectus."
The company "concealed important financial facts and forged sales figures in IPO application materials and prospectus," Chinese prosecutors said.
Chen's predecessor, Gong Yongfu, was sentenced to three years and six months in jail and fined 100,000 yuan.