Sun-Diamond Orders Audit of Crop Payments

An unprecedented audit will be made of Sun-Diamond Growers of California because walnut and raisin growers belonging to the cooperative may have been overpaid for their crops for several years, Sun-Diamond President Frank Light said.

A check of all inventories held by Sun-Diamond’s five commodity cooperatives will be conducted next month as part of an independent balance-sheet audit, Light said earlier this week.

An internal review of crop payments turned up “accounting irregularities” and “evidence of overpayments” to the growers, Light said.

Company officials confirmed Wednesday that discrepancies found during the accounting review led to the suspension of the cooperative’s controller and a senior production manager.

Sun-Diamond was formed in 1980 to pool marketing efforts of three of the state’s biggest dried fruit and nut cooperatives: Sun-Maid, the huge raisin cooperative, Diamond’s walnut suppliers and Sunsweet’s prune products.

Face Possible Losses

Its two largest cooperative members, 2,800-member Diamond Walnut Growers and 2,200-member Sun-Maid Growers of California, face possible losses on payments that they received over several years. Light said he did not know which years might be involved.

Diamond Walnut’s main plant is in Stockton. Sun-Maid’s main plant is in Kingsburg, near Fresno.

Light said no evidence of problems with Sun-Diamond’s prune, fig or hazelnut operations has been found, but they also will be audited.

Light would not say whether walnut and raisin growers will owe money to the cooperative.

“It’s just too early to tell,” he said. “We won’t know anything until we complete the audit.”