New Zealand kiwifruit marketer Zespri has cut the cord with a Chinese importer embroiled in a smuggling case that has seen staff members from several fruit-trading companies detained by the authorities.

When the scandal surrounding Dalian Yidu arose, Zespri played down its connection to the group by highlighting it only accounted for 5% of New Zealand's China-bound kiwifruit export volume, but now that stance has been taken a step further.

"Obviously we continue to monitor the situation with Yidu. Right now we have suspended our business relationship with them," Zespri CEO Lain Jager told the New Zealand Herald.

"We continue to believe that we don't have any exposure from a kiwifruit perspective. Certainly there is no financial exposure and we do not think that we are implicated in any way, so for us it is just a watching brief," the executive was quoted as saying.

Neither Chinese customs nor the Chinese media have directly implicated Dalian Yidu in smuggling, but broadcaster CCTV's did mention of the arrests of key figures from the "Dalian Liu family" which imports frozen beef, seafood and fruit.

Speaking with the New Zealand Herald, Jager pointed to Chinese President Xi Jinping's well-known anti-corruption campaign that meant business practices were rapidly evolving.

"On the one hand, it is tremendously positive, but on the other it creates risks."

He told the publication careful due diligence was needed when appointing importers in China.

"We work with them closely to ensure that the full duties are being paid on our product.

"Like all business, it's about risk management and in our view the opportunity is worth the risk, and so we will persevere and we will do everything we can to ensure that our business practices are robust."

The claims come as former Zespri employee Joseph Yu continues his case against the kiwifruit marketer with the Employment Relations Authority (ERA), alleging the firm ran a "corrupt or dishonest" business.

Yu was the marketing manager at Zespri Management Consulting Company (ZMCC), and was sentenced to five years in jail in 2013 for being an accessory to smuggling charges, which cost the firm nearly NZ$1 million (US$780,000) in fines.

The Sunday Star Times reported Yu was claiming damages for the loss of earnings and liberty as a result of the sentence, which related to dual invoicing for the underpayment of customs duties.

In a statement given to the ERA, Yu claimed he raised concerns about the invoicing practice in 2008 but was reassured the arrangement was legal. He also said he was in fact not the president of ZMCC, alleging his boss was Yu-Jan Chen who fled the country.

Chen told the publication Yu had allegedly been badly treated by Zespri, claiming he was working with the incarcerated man's family to try and clear his name.

"This is not a China issue it is a Zespri issue. They have everything to blame," Chen told the publication in an email.

Zespri refuted the claims in a statement given to the Sunday Star Times.

The story also reported the Serious Fraud Office's (SFO) investigation into Zespri had led the single desk marketer to spend at least NZ$2.8 million (US$2.09 million) in legal fees.

To put this figure in perspective, that's enough money to pay for around 280 hectares worth of licensing fees for Zespri's G3 kiwifruit variety, which was developed by Plant & Food Research with the support of funding from New Zealand's taxpayers.

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