Parmalat SpA , is a
multinationalA multinational corporation or transnational corporation , also called multinational enterprise , is a corporation or enterprise that manages production or delivers services in more than one country...
ItalianItaly , officially the Italian Republic , is a country located on the Italian Peninsula in Southern Europe and on the two largest islands in the Mediterranean Sea, Sicily and Sardinia. Italy shares its northern, Alpine boundary with France, Switzerland, Austria and Slovenia...
dairyA dairy is a facility for the extraction and processing of animal milk—mostly from cows or goats, but also from buffalo, sheep, horses or camels —for human consumption. Typically it is a farm or section of a farm that is concerned with the production of milk, butter and...
and food corporation. Having become the leading global company in the production of UHT (Ultra High Temperature)
milkMilk is an opaque white liquid produced by the mammary glands of mammals. It provides the primary source of nutrition for young mammals before they are able to digest other types of food. The early lactation milk is known as colostrum, and carries the mother's antibodies to the baby. It can reduce...
, the company collapsed in 2003 with a 14bn euro ($20bn; £13bn) hole in its accounts in what remains Europe's biggest bankruptcy. Today, Parmalat is a company with a global presence, having major operations in
EuropeEurope is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally divided from Asia to its east by the water divide of the Ural Mountains, the Ural River, the Caspian Sea, the Caucasus Mountains , and the Black Sea to the southeast...
,
Latin AmericaLatin America is a region of the Americas where Romance languages – particularly Spanish, Portuguese, and variably French – are primarily spoken. Latin America has an area of approximately 21,069,501 km² , almost 3.9% of the Earth's surface or 14.1% of its land surface area...
,
North AmericaNorth America is the northern continent of the Americas, situated in the Earth's northern hemisphere and in the western hemisphere. It is bordered on the north by the Arctic Ocean, on the east by the North Atlantic Ocean, on the southeast by the Caribbean Sea, and on the west by the North Pacific...
,
AustraliaAustralia , officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the continental mainland , the island of Tasmania, and numerous smaller islands in the Indian and Pacific Oceans...
,
ChinaChina is a cultural region, an ancient civilization, and, depending on perspective, a national or multinational entity extending over a large area in East Asia....
and
South AfricaThe Republic of South Africa is a country located at the southern tip of Africa, with a coastline on the Atlantic and Indian Oceans. To the north lie Namibia, Botswana and Zimbabwe, to the east are Mozambique and Swaziland, while Lesotho is an independent country surrounded by South Africa.Modern...
.
Still specializing in UHT milk and milk derivatives (varieties of
yoghurtYoghurt or yogurt is a dairy product produced by bacterial fermentation of milk. Fermentation of lactose produces lactic acid, which acts on milk protein to give yoghurt its texture and its characteristic tang...
,
cheeseCheese is a food consisting of proteins and fat from milk, usually the milk of cows, buffalo, goats, or sheep. It is produced by coagulation of the milk protein casein. Typically, the milk is acidified and addition of the enzyme rennet causes coagulation. The solids are separated and pressed into...
,
butterButter is a dairy product made by churning fresh or fermented cream or milk. It is generally used as a spread and a condiment, as well as in cooking applications such as baking, sauce making, and frying...
,
ice creamIce cream or ice-cream is a frozen dessert usually made from dairy products, such as milk and cream, combined with fruits or other ingredients and flavours. Most varieties contain sugar, although some are made with other sweeteners. In some cases, artificial flavourings and colorings are used in...
, etc.), the group also has an interest in fruit juices.
Parmalat SpA , is a
multinationalA multinational corporation or transnational corporation , also called multinational enterprise , is a corporation or enterprise that manages production or delivers services in more than one country...
ItalianItaly , officially the Italian Republic , is a country located on the Italian Peninsula in Southern Europe and on the two largest islands in the Mediterranean Sea, Sicily and Sardinia. Italy shares its northern, Alpine boundary with France, Switzerland, Austria and Slovenia...
dairyA dairy is a facility for the extraction and processing of animal milk—mostly from cows or goats, but also from buffalo, sheep, horses or camels —for human consumption. Typically it is a farm or section of a farm that is concerned with the production of milk, butter and...
and food corporation. Having become the leading global company in the production of UHT (Ultra High Temperature)
milkMilk is an opaque white liquid produced by the mammary glands of mammals. It provides the primary source of nutrition for young mammals before they are able to digest other types of food. The early lactation milk is known as colostrum, and carries the mother's antibodies to the baby. It can reduce...
, the company collapsed in 2003 with a 14bn euro ($20bn; £13bn) hole in its accounts in what remains Europe's biggest bankruptcy. Today, Parmalat is a company with a global presence, having major operations in
EuropeEurope is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally divided from Asia to its east by the water divide of the Ural Mountains, the Ural River, the Caspian Sea, the Caucasus Mountains , and the Black Sea to the southeast...
,
Latin AmericaLatin America is a region of the Americas where Romance languages – particularly Spanish, Portuguese, and variably French – are primarily spoken. Latin America has an area of approximately 21,069,501 km² , almost 3.9% of the Earth's surface or 14.1% of its land surface area...
,
North AmericaNorth America is the northern continent of the Americas, situated in the Earth's northern hemisphere and in the western hemisphere. It is bordered on the north by the Arctic Ocean, on the east by the North Atlantic Ocean, on the southeast by the Caribbean Sea, and on the west by the North Pacific...
,
AustraliaAustralia , officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the continental mainland , the island of Tasmania, and numerous smaller islands in the Indian and Pacific Oceans...
,
ChinaChina is a cultural region, an ancient civilization, and, depending on perspective, a national or multinational entity extending over a large area in East Asia....
and
South AfricaThe Republic of South Africa is a country located at the southern tip of Africa, with a coastline on the Atlantic and Indian Oceans. To the north lie Namibia, Botswana and Zimbabwe, to the east are Mozambique and Swaziland, while Lesotho is an independent country surrounded by South Africa.Modern...
.
Still specializing in UHT milk and milk derivatives (varieties of
yoghurtYoghurt or yogurt is a dairy product produced by bacterial fermentation of milk. Fermentation of lactose produces lactic acid, which acts on milk protein to give yoghurt its texture and its characteristic tang...
,
cheeseCheese is a food consisting of proteins and fat from milk, usually the milk of cows, buffalo, goats, or sheep. It is produced by coagulation of the milk protein casein. Typically, the milk is acidified and addition of the enzyme rennet causes coagulation. The solids are separated and pressed into...
,
butterButter is a dairy product made by churning fresh or fermented cream or milk. It is generally used as a spread and a condiment, as well as in cooking applications such as baking, sauce making, and frying...
,
ice creamIce cream or ice-cream is a frozen dessert usually made from dairy products, such as milk and cream, combined with fruits or other ingredients and flavours. Most varieties contain sugar, although some are made with other sweeteners. In some cases, artificial flavourings and colorings are used in...
, etc.), the group also has an interest in fruit juices. These products are distributed under well-known brand names such as Lactis, Santal, Malù, and Kyr. Its worldwide operations include almost 140 production centres and more than 36,000 employees, while 5,000 Italian dairy farms are dependent on the company for the bulk of their business. Its shares are listed on the Milan Stock Exchange.
History
In 1961,
Calisto TanziCalisto Tanzi is an Italian businessman notorious for embezzling an estimated eight-hundred million euros from Italian company Parmalat, founded by him, resulting in a great loss for the company. Tanzi was the founder of Parmalat and its CEO at the time. Tanzi founded Parmalat in 1961 after...
, a 22-year old college dropout, opened a small pasteurisation plant in Parma, Italy. Four decades later, the company had grown into a
multinational corporationA multinational corporation or transnational corporation , also called multinational enterprise , is a corporation or enterprise that manages production or delivers services in more than one country...
diversifying into
milkMilk is an opaque white liquid produced by the mammary glands of mammals. It provides the primary source of nutrition for young mammals before they are able to digest other types of food. The early lactation milk is known as colostrum, and carries the mother's antibodies to the baby. It can reduce...
, dairy, beverage,
bakeryA bakery is an establishment which produces or/and sells bread, pies, pastries, cakes & cupcakes, biscuits, cookies, muffins, rolls, pretzels, doughnuts, and other baked goods prepared by bakers. Many retail bakeries are also cafés, serving coffee and tea to customers who wish to enjoy the freshly...
, and other product lines in the 1980s, becoming listed on the Milan stock exchange in 1990, and expanding further in the 1990s.
Runaway expansion
The post-listing expansions include:
- Expansion into thirty countries from six in 1990
- Parma A.C.
Parma Football Club is an Italian football club based in Parma, Emilia-Romagna, that are competing in the 2009-10 Serie A season. The club plays its home matches in the 27,906 seat Stadio Ennio Tardini...
- Brazil
Brazil , officially the Federative Republic of Brazil , is a country in South America. It is the fifth largest country by geographical area, occupying nearly half of South America, the fifth most populous country, and the fourth most populous democracy in the world. Bounded by the Atlantic Ocean...
ian Formula OneFormula One, also known as Formula 1 or F1, and currently officially referred to as the FIA Formula One World Championship, is the highest class of auto racing sanctioned by the Fédération Internationale de l'Automobile . The "formula" in the name refers to a set of rules to which all participants...
racing driver Pedro DinizPedro Paulo Diniz is a racing driver from Brazil. He participated in 99 Formula One Grands Prix, debuting on March 26, 1995...
.
- Tanzi's son Stefano, president and Parmalat board member
- ParmaTour - travel group (bankrupt, sold)
- Francesca - chief executive
- TV network, Odeon TV
Odeon TV is a Italian television network that offer, with a own television syndication network, a light entertainment program: movies, news and weather bulletins, political debates and variety shows....
(sold)
Financial fraud
It was in 1997 that Parmalat jumped into the world financial markets in a big way, financing several international acquisitions, especially in the Western Hemisphere, with debt. But by 2001, many of the new divisions were producing losses, and the company financing shifted largely to the use of derivatives, apparently at least in part with the intention of hiding the extent of its losses and debt.
In February 2003,
chief financial officerThe chief financial officer is a corporate officer primarily responsible for managing the financial risks of the corporation. This officer is also responsible for financial planning and record-keeping, as well as financial reporting to higher management. In some sectors the CFO is also...
Fausto Tonna unexpectedly announced a new €500 million bond issue. This came as a surprise both to the markets and to the CEO, Tanzi. Tanzi fired Tonna and replaced him as CFO with Alberto Ferraris.
According to an interview he later gave Time magazine, Ferraris was surprised to discover that, though now CFO, he still didn't have access to some of the corporate books, which were being handled by
chief accounting officerA chief accounting officer is typically responsible for overseeing all aspects of an organization's accounting function. The C-level position often reports to top level management and requires extensive experience....
Luciano Del Soldato. He began making some inquiries and began to suspect that the company's total debt was more than double that on the balance sheet.
The crisis became public in November when questions were raised about transactions with
mutual fundA mutual fund is a professionally managed type of collective investment scheme that pools money from many investors and invests it in stocks, bonds, short-term money market instruments, and/or other securities. The mutual fund will have a fund manager that trades the pooled money on a regular basis...
Epicurum, another Cayman-based company linked to Parmalat causing its stock to plummet. Ferraris resigned less than a week later and was replaced by Del Soldato.
In December, Del Soldato resigned, unable to get cash from Epicurum fund, needed to pay debts and make bond payments. Enrico Bondi was called in to help the company. Tanzi himself resigned as chairman and CEO. Parmalat's bank,
Bank of AmericaBank of America Corporation , based in Charlotte, North Carolina is one of the largest financial services companies, largest bank by assets, largest commercial bank by deposits and is the second largest by market capitalization in the United States. The company holds 12.2% of all U.S. deposits...
, then released a document showing €3.95 billion in Bonlat's bank account as a
forgeryForgery is the process of making, adapting, or imitating objects, statistics, or documents , with the intent to deceive. The similar crime of fraud is the crime of deceiving another, including through the use of objects obtained through forgery...
. Prime Minister
Silvio Berlusconiis an Italian politician, entrepreneur, real estate and insurance tycoon, bank and media proprietor, sports team owner and songwriter. He is the longest-serving Prime Minister of the Italian Republic , a position he has held on three separate occasions: from 1994 to 1995, from 2001 to 2006 and...
initiated a fraud investigation and appointed Bondi to administer the company's rescue. Hundreds of thousands of investors lost their money and will never recover it. The company officially went bankrupt, though the Italian government used the legal mean "commissariamento" to save the trademark.
Arrests and trial
Calisto Tanzi, once a symbol of unlimited success, was detained hours after the firm was declared officially insolvent and eventually charged with financial
fraudIn the broadest sense, a fraud is an intentional deception made for personal gain or to damage another individual. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and is also a civil law violation....
and
money launderingMoney laundering is the process of creating the appearance that large amounts of money obtained from serious crimes, such as drug trafficking or terrorist activity, originated from a legitimate source. It is a crime in many jurisdictions with varying definitions...
. Italians were shocked that such a vast and established empire could crumble so quickly. Among the questionable accounting practices used by Parmalat: it sold itself
credit-linked noteA credit linked note is a form of funded credit derivative. It is structured as a security with an embedded credit default swap allowing the issuer to transfer a specific credit risk to credit investors. The issuer is not obligated to repay the debt if a specified event occurs...
s, in effect placing a bet on its own credit worthiness in order to conjure up an
assetIn business and accounting, assets are economic resources owned by business or company. Anything tangible or intangible that one possesses, usually considered as applicable to the payment of one's debts is considered an asset. Simplistically stated, assets are things of value that can be readily...
out of thin air.
After his arrest, Tanzi reportedly admitted during questioning at
MilanMilan in Italy, is the capital of the region of Lombardia and of the province of Milan. The city proper has a population of about 1.3 million, while the urban area is the fifth largest in the E.U. with an estimated population of 4.3 million...
's San Vittore prison, that he diverted funds from
Parmalat into Parmatour and elsewhere. The family
footballParma Football Club is an Italian football club based in Parma, Emilia-Romagna, that are competing in the 2009-10 Serie A season. The club plays its home matches in the 27,906 seat Stadio Ennio Tardini...
and tourism enterprises were financial disasters; as well as Tanzi's attempt to rival Berlusconi by buying Odeon TV, only to sell it at a loss of about €45 million.
Tanzi has been sentenced to 10 years in prison for fraud relating to the collapse of the dairy group. The other seven defendants, including executives and bankers, were acquitted. Another eight defendants settled out of court in September 2008.
Parmalat in Formula One
Parmalat's name was notable outside Italy in
Formula OneFormula One, also known as Formula 1 or F1, and currently officially referred to as the FIA Formula One World Championship, is the highest class of auto racing sanctioned by the Fédération Internationale de l'Automobile . The "formula" in the name refers to a set of rules to which all participants...
. Their name was emblazoned on the cap of
Niki LaudaAndreas Nikolaus "Niki" Lauda is an Austrian aviator, entrepreneur, former Formula One racing driver and three-time F1 World Champion. He has founded and run two airlines and was manager of the Jaguar Formula One racing team for two years.-Early years in racing:Born in Vienna, Austria, to a...
, which he always wore following his
1976 German Grand PrixThe 1976 German Grand Prix was a Formula One race held at the Nürburgring on 1 August 1976. It was also the last Formula One race to be held on the Nordschleife section of the track.- Race report :...
incident.
They also sponsored
Pedro DinizPedro Paulo Diniz is a racing driver from Brazil. He participated in 99 Formula One Grands Prix, debuting on March 26, 1995...
throughout his Formula One career, and their logo was seen on Forti, Arrows, Ligier and Sauber cars from 1995-2000.
Parmalat in the world (now)
Directed presence
- Italy
Italy , officially the Italian Republic , is a country located on the Italian Peninsula in Southern Europe and on the two largest islands in the Mediterranean Sea, Sicily and Sardinia. Italy shares its northern, Alpine boundary with France, Switzerland, Austria and Slovenia...
- Portugal
Portugal , officially the Portuguese Republic , is a country located in southwestern Europe on the Iberian Peninsula. Portugal is the westernmost country of mainland Europe and is bordered by the Atlantic Ocean to the west and south and by Spain to the north and east...
- Romania
Romania is a country located in Southeastern and Central Europe, North of the Balkan Peninsula, on the Lower Danube, within and outside the Carpathian arch, bordering on the Black Sea. Almost all of the Danube Delta is located within its territory...
- Russia
Russia , officially known as both Russia and the Russian Federation , is a country in northern Eurasia . It is a semi-presidential republic, comprising 83 federal subjects...
- Australia
Australia , officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the continental mainland , the island of Tasmania, and numerous smaller islands in the Indian and Pacific Oceans...
- Botswana
The Republic of Botswana is a landlocked country in Southern Africa. Citizens of Botswana are called "Batswana" , regardless of ethnicity. Formerly a British protectorate of Bechuanaland, Botswana adopted its new name after becoming independent within the Commonwealth on 30 September 1966...
- Canada
Canada is a country occupying most of northern North America, extending from the Atlantic Ocean in the east to the Pacific Ocean in the west and northward into the Arctic Ocean...
- Colombia
Colombia , officially the Republic of Colombia , is a constitutional republic in northwestern South America. Colombia is bordered to the east by Venezuela and Brazil; to the south by Ecuador and Peru; to the north by the Caribbean Sea; to the northwest by Panama; and to the west by the Pacific Ocean...
- Cuba
The Republic of Cuba is an island country in the Caribbean. It consists of the island of Cuba, the Isla de la Juventud, and several archipelagos. Havana is the largest city in Cuba and the country's capital. Santiago de Cuba is the second largest city. Cuba is home to over 11 million people and is...
- Ecuador
Ecuador , officially the Republic of Ecuador , literally, "Republic of the equator") is a representative democratic republic in South America, bordered by Colombia on the north, Peru on the east and south, and by the Pacific Ocean to the west. It is one of only two countries in South America that...
- Mozambique
Mozambique, officially the Republic of Mozambique , is a country in southeastern Africa bordered by the Indian Ocean to the east, Tanzania to the north, Malawi and Zambia to the northwest, Zimbabwe to the west and Swaziland and South Africa to the southwest. It was explored by Vasco da Gama in 1498...
- Nicaragua
Nicaragua officially the Republic of Nicaragua , is a representative democratic republic. It is the largest country in Central America with an area of 130,373 km
2. The country is bordered by Honduras to the north and Costa Rica to the south. The Pacific Ocean lies to the west of...
- Paraguay
Paraguay, officially the Republic of Paraguay , is one of the two landlocked countries which lie entirely within the Western Hemisphere, the other being Bolivia, both in South America....
- South Africa
The Republic of South Africa is a country located at the southern tip of Africa, with a coastline on the Atlantic and Indian Oceans. To the north lie Namibia, Botswana and Zimbabwe, to the east are Mozambique and Swaziland, while Lesotho is an independent country surrounded by South Africa.Modern...
- Swaziland
The Kingdom of Swaziland , sometimes called Ngwane, is a landlocked country in Southern Africa, bordered to the north, south, and west by South Africa, and to the east by Mozambique. The nation, as well as its people, are named after the 19th century king Mswati II.Swaziland is a small country, no...
- Venezuela
Venezuela , officially titled Bolivarian Republic of Venezuela , is a tropical country on the northern coast of South America. It is a continental mainland with numerous islands located off its coastline in the Caribbean Sea...
- Zambia
The Republic of Zambia is a landlocked country in Southern Africa. The neighbouring countries are the Democratic Republic of the Congo to the north, Tanzania to the north-east, Malawi to the east, Mozambique, Zimbabwe, Botswana, and Namibia to the south, and Angola to the west. The capital city is...
Presence under licence
- Brazil
Brazil , officially the Federative Republic of Brazil , is a country in South America. It is the fifth largest country by geographical area, occupying nearly half of South America, the fifth most populous country, and the fourth most populous democracy in the world. Bounded by the Atlantic Ocean...
- Chile
Chile, officially the Republic of Chile , is a country in South America occupying a long, narrow coastal strip between the Andes mountains to the east and the Pacific Ocean to the west. It borders Peru to the north, Bolivia to the northeast, Argentina to the east, and the Drake Passage in the far...
- China
China is a cultural region, an ancient civilization, and, depending on perspective, a national or multinational entity extending over a large area in East Asia....
- Dominican Republic
The Dominican Republic is a nation on the island of Hispaniola, part of the Greater Antilles archipelago in the Caribbean region. The western third of the island is occupied by the nation of Haiti, making Hispaniola one of two Caribbean islands that are occupied by two countries...
- Hungary
Hungary , in English officially the Republic of Hungary , is a landlocked country in the Carpathian Basin of Central Europe, bordered by Austria, Slovakia, Ukraine, Romania, Serbia, Croatia, and Slovenia. Its capital is Budapest. Hungary is a member of OECD, NATO, EU, V4 and is a Schengen state...
- Mexico
The United Mexican States , commonly known as Mexico , is a federal constitutional republic in North America. It is bordered on the north by the United States; on the south and west by the Pacific Ocean; on the southeast by Guatemala, Belize, and the Caribbean Sea; and on the east by the Gulf of...
- Spain
Spain , officially the Kingdom of Spain , is a country located in southwestern Europe on the Iberian Peninsula.
[The Spanish constitution does not establish any official denomination of the country, even though España , Estado español and Nación española are used interchangeably...]
- United States of America
- Uruguay
Uruguay , is a country located in the southeastern part of South America. It is home to 3.46 million people, of whom 1.1 million live in the capital Montevideo and its metropolitan area. An estimated 88–94% of the population are of mostly European and/or mixed descent.Uruguay's only land border is...
See also
- List of Italian companies
- Corporate abuse
- Gianmario Roveraro
Gianmario Roveraro was an Italian banker who founded Akros Finanziaria. He went missing on July 5, 2006 following an Opus Dei meeting. It is thought that he was kidnapped, although no ransom was made. He contacted his family twice: once to call his wife and tell her he had to resolve an issue...
- Parmalat bankruptcy timeline
- December 2003 :December 19 - Bank of America states Parmalat does not hold nearly $5B in liquid assets for the company as Parmalat reported in September 2003. Bank of America disavows the document released by Parmalat’s Bonlat Financing Corp unit claiming over €4B are being stored by an affiliate...
External links