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Italian police search Parmalat, Lactalis offices in LAG deal probe

By Mark Astley , 12-Dec-2012

Parmalat HQ in Collecchio, Parma was searched by Italian police yesterday, the company confirmed.
Parmalat HQ in Collecchio, Parma was searched by Italian police yesterday, the company confirmed.

The Italian headquarters of Parmalat and its owner, French dairy giant Lactalis, have been searched by Italian police as part of an investigation into Parmalat’s May 2012 intra-group acquisition of Lactalis American Group (LAG).

The Guardia della Finanza – the Italian Finance Police – announced yesterday that it had conducted searches at Parmalat HQ in Collecchio and at offices of Gruppo Lactalis Italia – the operating company that manages Parmalat.

The searches relate to Parmalat’s $904m acquisition of sister unit LAG earlier this year. Parmalat, Lactalis and LAG are all owned by the same company – BSA International.

In recent months, concerns have been raised about the deal by Parmalat shareholders, Italy’s industry minister Corrado Passera, and the Italian stock exchange regulator COSNOB.

The latter questioned the use of Parmalat’s €1.5bn cash pile to finance the acquisition, suggesting that BSA International drained cash from the Italian dairy processor through the deal.

DairyReporter.com approached Parmalat about the searches. Spokesperson for the firm, Fabio Caporizzi confirmed that police searches had taken place.

Parmalat “not concerned”

“The Financial Police of Bologna and Parma have conducted a search of Parmalat HQ in Collecchio in Parma. They have also conducted searches at Grupo Lactalis Italia – the operating company that manages Parmalat,” said Caporizzi.

“We don’t have a clue why the public prosecutor decided to inspect our offices. We assume they wanted to acquire information.”

“On the Financial Police website, we read that the investigation relates to their hypothesis that there was something wrong in the decision to acquire an external company.”

When pressed on whether the acquisition in question was the takeover of LAG, Caporizzi replied: “Yes, we think so.”

He added that the company was surprised by the police decision to search its headquarters.

“This has been a surprise. It is unusual for a company like Parmalat to be searched by police,” he said, despite the firm’s 2003 collapse in the wake of €14bn accounting fraud.

“Parmalat is not concerned. It is giving all help to the police; we are providing them with whatever they need. Parmalat is confident of the absolute correctness of its work.”

Separate investigation

In October 2012, three judges opened a review into the acquisition of LAG after concerns were raised about the legality of the deal. The judicial review is still on-going.

According to Caporizzi, these searches were nothing to do with the on-going judicial review.

“From what I understand, it is separate from the judicial hearing, which is still in court,” he said. “This search has probably been ordered by the public prosecutor in Parma.”

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