An Italian criminal investigation into Parmalat's May 2012 disputed acquisition of Lactalis American Group (LAG) is "completely over", says the Parma-based dairy giant.
In a statement issued earlier this week, Parmalat announced that the Bologna Court of Appeal had rejected new "applications" made the by the Public Prosecutor's Office relating to its acquisition of LAG and “declared the termination of the disputed matter."
In 2011, French dairy giant Lactalis acquired Parmalat. The following year, in May 2012, Parmalat agreed to buy Lactalis American Group (LAG), the US subsidiary of Lactalis, for $904m (€661m).
Civil and criminal investigations were subsequently launched by Italian authorities after minority shareholders questioned whether Parmalat had acted in the interests of its parent company Lactalis by overpaying for the North American business.
Two years on, after several twists and turns, a Parmalat spokesperson confidently assured DairyReporter.com that the probing of its dealings is finished.
“It is completely over,” said the spokesperson.
“The judge in Bologna decided that nothing else can go on. This effectively means that everything done by Parmalat management was OK.”
Early in the investigation, in December 2012, Parmalat HQ in Parma and the Italian offices of French dairy giant Lactalis were searched by police.
Following this, a number of Parmalat executives were informed in December 2012 that they had been made the subject of an investigation into "aggravated embezzlement."
This separate criminal investigation, which involves more than one individual who sat on the board during the LAG deal, remains open, said the Parmalat spokesperson.
"This is a criminal investigation to see if an individual has done something from a criminal point of view."
Parmalat "expects nothing more" from this investigation however, said the spokesperson.
Nine of the 11 members of Parmalat’s board resigned in February 2014. In a single letter announcing their resignations, the nine said that while "convinced to have always acted in the most correct manner" they would leave their post "to allow the Company itself to operate once more in a constructive and serene environment."
The civil investigation meanwhile culminated with the appointment of Professor Angelo Manaresi as a special commissioner in April 2013 to oversee a pre-agreed assessment of the acquisition price.
This resulted in a $130m (US$175m) reduction in the purchase price in June 2013.
Time and money
Despite now being out of the woods, the Parmalat spokesperson declined to call the Bologna Court of Appeal decision a victory for the company.
“It is what we expected,” said the spokesperson. “From our perspective everything was done in the interests of Parmalat shareholders.”
“It has cost us a lot of resources, a lot of time and money.”
“This time could have been used to grow the company," the spokesperson added.