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Discussion Starter · #1 · ... TopStories

Updated Tue. Apr. 10 2007 7:23 AM ET News Staff

The chief financial officer of Menu Foods Income Fund says it was a "horrible coincidence" that he sold nearly half his units in the pet food company less than three weeks before a massive product recall.

Insider trading reports confirm that Mark Wiens sold 14,000 units, or 45 per cent of his stock, for $102,900 on Feb. 26 and Feb. 27, reports The Globe and Mail. The shares would be worth $62,440 at current prices.

Wiens still owned 17,193 units and options to purchase 101,812 units after the sale.

"It's a horrible coincidence, yes . . ." Wiens told The Globe.

"I hold myself to the highest ethical and moral standards possible. I wouldn't do anything to imperil the high governance standards that I demand of myself or anybody in the company."

Wiens said the first reports about pet-related illnesses connected to Menu Foods products were made in late February.

However, he said that he did not hear about the issue until early March.

The Streetsville, Ont. company eventually issued a recall for 60 million containers of dog and cat food on March 16.

"In terms of process, during any given year, we get consumer complaints all the time and it becomes matter of course for our technical people, so it's not something that necessarily gets flagged right to the top on an ongoing basis," said Wiens.

Paul Henderson, the president and chief executive of Menu Foods, said his company severed its relationship with its Chinese supplier of wheat gluten on March 6. Melamine in the supplied wheat gluten has been identified as the root of the problem.

Henderson said in a recent press conference that by March 6, it was evident that "something was wrong" with some of the company's products.

Wiens said he has not been contacted by the Ontario Securities Commission or any other regulators since the problems erupted at Menu Foods.

OSC spokesperson Wendy Dey told the Globe that the commission reviews insider trading reports routinely but she said they do not comment on individual cases.

Wiens explained that he sold his shares for financial planning purposes and that he was prohibited from selling until Feb. 16 because of an implemented blackout period.

He said he recognized why questions would arise about his trade.

"Certainly there would be questions when you piece all the timing together. I understand that," he said.

Multiple manufacturers have since recalled their pet foods after using the same supplier.

1,240 Posts
thats to bad, but I dont think anyone could have known 3 weeks out and certainly someone in his position wouldnt have sold stock worth only 100k to try to take advantage of the situation do you think? Its only a 40K gain. Cant imagine a CEO wouldnt make that kind of money in 3 or 4 months ya know?

I feel bad for menu foods to a degree because I cant in my wildest dreams imagine a company purposely buying tainted product and using it to manufacture. And I really felt that in the beginning no one including menu knew what or where it was.

I just hope once they discovered it that the details were released timely to the public and that the FDA didnt hamper anything. We will probably never know.

I feel so bad for everyone affected by this. I cant even imagine the pain this company in china has caused everyone :(

Discussion Starter · #3 ·
I have to say I have lost faith at every turn of this investigation. Here is the latest recall issued Tuesday:

Medi-Cal vet-prescribed cat food added to recalls
Updated Tue. Apr. 10 2007 4:53 PM ET News Staff

Another brand of cat food is being recalled after Royal Canin Canada discovered from Menu Foods that one lot of its product contained contaminated wheat gluten.

The affected product is Medi-Cal Feline Dissolution Formula canned food.

One production lot with the best before date of Jan. 8, 2009 contains the tainted ingredient. But Royal Canin is taking the precautionary step of recalling all date codes.

The food is prescribed only through veterinary clinics and is not available through retail outlets. It is the only Royal Canin or Medi-Cal product being recalled.

In a statement, the company says they learned late Monday from Menu Foods, which makes the product, that contaminated wheat gluten had been used in this product.

Royal Canin Canada says this is despite repeated assurances they received from Menu Foods that no contaminated wheat gluten made its way into Canada.

"After being repeatedly reassured by Menu Foods, as reinforced by FDA public statements, that none of the contaminated wheat gluten had made its way to Canada, we were completely shocked to learn yesterday that this was not the case, and that this wheat gluten had been used in the Feline Dissolution Formula canned product," said Xavier Unkovic, CEO of Royal Canin Canada.

"As animal health professionals and pet owners ourselves, we know this recall will cause concern for our customers as it has for our entire Medi-Cal/Royal Canin team," said Dr. Brent Matthew, Veterinary Division Director. "We deeply regret that this has occurred."

The U.S. Food and Drug Administration last month announced that it had found melamine, a chemical used in plastics and some fertilizer, in samples of recalled pet food.

Pet owners who are feeding the recalled product to their cats and have questions are asked to call Royal Canin at 1-866-494-6844.

15,203 Posts
Ok 1st off i have to do more reading on this.

2nd...all i will say is i am sure they will investigate further if the general public pursues this report.

3rdly without disclosing things...sometimes one in a company can forsee or hear about potential problems , issues etc. It happens alot in companies the higher up they are. It is a part of life for themto stay ahead of things.
Also what kind of financial planning was he doing? If the company was doing really well he wouldn't have sold HALF his stocks.
Ususually i give benefit of doubt, but in this instance with firsthand knowledge of testing etc....i really have my doubts this time.

i am not going into specifics at the moment, want to read up first

Discussion Starter · #5 ·
I can't say that the company as a whole has my vote of confidence. They stopped using the gluten supplier March 6th because they suspected it was contaminated and causing deaths, BUT they did not issue the recall until 10 DAYS LATER on March 16th. ... l_20070318

Shortly after receipt of the first complaint, the Fund initiated a substantial battery of technical tests, conducted by both internal and external specialists, but has failed to identify any issues with the products in question. The Fund has, however, discovered that timing of the production associated with these complaints, coincides with the introduction of an ingredient from a new supplier. The Fund stopped using this ingredient shortly after this discovery and production since then has been undertaken using ingredients from another source.

Okay, so let me get this straight. After switching to a new supplier, Menu Foods got complaints, started testing and switched the suspect supplier on March 6th, but didn't recall the products until 10 days later?
February 20, 2007:
Menu Foods receives the first of 6 customer reports that its food is making pets sick.
February 27, 2007:
As a part of its quarterly feeding trials, Menu Foods feeds their product to 40-50 cats and dogs.
Menu Foods CFO sells 12,700 of his Menu Foods shares.
March 2, 2007:
The first of 9 animals in Menu Foods feeding trial dies of acute renal failure. Mortality rate is quoted at 1 in 6.
March 6, 2007:
Menu Foods switches its supply of wheat gluten due to lab animal deaths.
March 16th: Recall begins

Discussion Starter · #6 ·
And the latest information:

Cornell lab reports second, unidentified toxin. ... 02101.html

Chinese criticized in pet food probe

By Karen Roebuck
Wednesday, April 11, 2007

The Chinese government and the company that supplied a contaminated ingredient are slowing the federal investigation into the nationwide recall of pet food, a U.S. Food and Drug Administration official said Tuesday.
Researchers, however, are making strides toward uncovering what has sickened cats and dogs nationwide. A lead scientist said yesterday he is convinced a second contaminant was in the wheat gluten, which FDA and independent researchers said was laced with high amounts of melamine, a chemical used in plastics.

Dr. Richard Goldstein, associate professor of medicine at Cornell University's College of Veterinary Medicine and a kidney specialist who is researching the outbreak's health impact on pets, said he and other researchers saw what they believe is a second contaminant in the gluten and the urine of infected animals, but have yet to identify it. Cornell is among labs working with the FDA.

"The concerted effort now is to identify what else is in there, and what's in the crystals" of infected animals' urine and tissue, Goldstein said.

Michael Rogers, director of the FDA's field investigations division, told the Pittsburgh Tribune-Review the agency has asked the Chinese government for help investigating the gluten and the supplier, Xuzhou Anying Biologic Technology Development Co. Ltd., based in Jiangsu province.

The FDA is disappointed with slow and incomplete Chinese responses, Rogers said.

"I usually don't speak in terms of cooperative or not cooperative," he said.

Chu Maoming, spokesman for the Chinese Embassy in Washington D.C., did not return calls or an e-mail requesting comment.

He told the Trib on March 30: "The Chinese Embassy is working closely with the FDA officers to determine the real cause." Since then, he has declined repeated requests for interviews with the embassy representative working with the FDA.

Although the agency got some information from the Chinese, Rogers said, "There remain a number of questions."

Federal investigators haven't determined whether Xuzhou Anying shipped other food products to the United States, or what other Chinese companies it sold wheat gluten to that, in turn, might have been shipped here, Rogers said. Xuzhou Anying's Web site said it also exports carrots, garlic, ginger, corn protein powder, vegetables and feed. Rogers said Chinese officials have not responded to the U.S. government's question about whether any products other than wheat gluten were shipped here.

"We're certainly reviewing all products from this source," he said. Since the recall, the company has shipped only wheat gluten to the United States, but U.S. officials still are unsure what might have been shipped prior to the recall, Rogers said.

"From an operational standpoint, we still have questions about this company," he said.

The FDA is screening all wheat gluten imported from China and the Netherlands at U.S. ports and seizing all wheat gluten from Xuzhou Anying.

Under the microscope and even to the naked eye, the contaminated gluten looks different from uncontaminated samples, Goldstein said. Researchers see melamine granules and other colored granules throughout the gluten, he said.

"There appears to be other things in there, other than the melamine, but identifying what they are is a long process," he said.

He said researchers ruled out aminopterin -- used as rat poison in other countries -- which New York state officials previously announced was in the pet food.

The FDA, Cornell and other researchers found melamine in high concentrations in the gluten -- up to 6.6 percent of the product.

Even so, they do not believe the melamine made the animals sick, although they said it is a marker for tracking the outbreak, because the crystal found in the melamine and in animals' urine and tissue is distinctive to this outbreak.

Because of a dearth of past studies on melamine exposure in dogs and cats, the only way to know for sure if it could cause the outbreak would be to feed the compound to those animals, Goldstein said, adding, "That's not an option."

More than 10 laboratories are researching the crystals and working together to develop criteria to determine which kidney illnesses were caused by the contaminated pet food. Although the link is relatively easy to establish because of the distinctive crystals, the process needed to find them is expensive and time-consuming, Goldstein said.

The labs will test urine and tissue samples from pets suspected of becoming ill from the food and possibly samples of the food, he said. How that will be accomplished and who will pay for it has not been determined, so pet owners and veterinarians are advised to keep those samples, he said. The labs are trying to develop a way to test for melamine more quickly and cheaply.

Karen Roebuck can be reached at [email protected] or (412) 320-7939.
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