Parmalat board meets to discuss future strategy
appointed as chief executive last week, will help to determine
which direction the Italian dairy giant goes from here.
It is likely that the meeting will represent a ringing endorsement of Bondi and his plans. The vast majority of shareholders clearly still have faith in his strategy of winning billions of euros in lawsuits against banks, and will likely provide him with the necessary backing to continue his plans.
Parmalat went into administration in December 2003 following the revelation that a key account with Bank of America did not exist. Holes in the firms accounts hid the fact that the company was a whopping €14 billion in debt.
Bondi, the government-appointed administrator, has sought financial compensation from some of the banks alleged to have been involved in Parmalat's collapse.
The future of the disgraced Italian dairy reached an impasse last week. A group of Italian banks were behind a bold move to disintegrate the group in order to separate the company's manufacturing operations from a mass of legal actions related to its collapse amid fraud two years ago.
This would have cleared the way for a quick sale to a rival, and put an end to Bondi's bold strategy. But by approving the appointment of a list of board members proposed by Lehman Brothers (LEH) with Bondi at the helm, the company's shareholders sent a clear message of support for the current strategy.
Bondi has already claimed €8.07 billion in damages in lawsuits filed against the group's auditors and banks. More recently, Bondi launched a €1.3 billion compensation claim against Italian banking group Sanpaolo IMI.
A first hearing is scheduled for 8 February 2006.
Parmalat has also sued banks JPMorgan Chase and Unicredito Italiano for €4.4 billion for their roles in the sale of Parmalat bonds issued from 1997 through 2001. Unicredito has consistently called the lawsuit groundless and said that it would defend its reputation, while JPMorgan has also denied any wrongdoing.
Indeed, the financial sector has repeatedly stated that it was fooled by the Parmalat fraud.
Today's board meeting agenda also includes more mundane necessities such as the appointment of some internal committees and procedures for the control of the company's corporate governance.