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.
