Parmalat play waiting game as Italian police conduct LAG 'embezzlement' probe
Last week, Tax Police units from Bologna and Parma executed search warrants at Parmalat’s corporate headquarters in Collecchio and at the offices of Gruppo Lactalis Italia – the operating company that manages Parmalat.
The warrants, which were issued by the Public Prosecutor at the Court of Parma, sought “documents concerning the acquisition of Lactalis American Group.”
Speaking with DairyReporter.com last week, the Italian dairy giant confirmed that searches were conducted in relation to its $904m acquisition of its sister unit, LAG.
Parmalat, LAG and French dairy giant Lactalis are owned by the same company, BSA International.
Notices have also been served to a number of Parmalat board members and executives, informing them that they are the target of an investigation into “aggravated embezzlement.”
Weeks, months or years
Speaking with DairyReporter.com today, Parmalat spokesperson Fabio Caporizzi confirmed that the Parma-based company has received no further information from Italian authorities in relation to the investigation.
“What the Public Prosecutor of Parma is looking to clarify is whether the LAG acquisition was completed in the interests of Parmalat, and if the price paid was fair and correct,” said Caporizzi.
“There are no limits in Italian legislation relating to the length of investigation. So, it could take days, weeks or months, and the worst case, years.”
“In the meantime, we are giving them all of our co-operation. Our lawyers and the Members of our Board are following the case very closely,” said Caporizzi.
“The Parmalat board is not worried,” he added.
Defending the deal, Caporizzi made comparisons to the recently agreed acquisition of Dean Foods’ Morningstar business by Canadian dairy giant Saputo.
“Buying Morningstar will help to further solidified Saputo’s position in the US. This is the same motive that drove Parmalat’s acquisition of LAG.”
“Of course they bought it from another company, but the principle is the same,” he added.
Judicial review ‘on-going’
Alongside the criminal investigation, a judicial review of the deal is “on-going” in Parma.
The hearing, which is being chaired by three judges, is set to close in January 2013 – at which point the three judges will have 45 days to decide whether a criminal investigation should be pursued.
The hearing was opened in October 2012 after it emerged that two minority shareholders in Parmalat had raised concerns about the motive behind the LAG takeover.
Italy’s industry minister, Corrado Passera, and the Italian stock exchange regulator COSNOB also raised concerns - with the latter questioning the use of Parmalat’s €1.5bn cash pile to finance the acquisition.
