Comparisons Between Agrokor and Italy’s Infamous Parmalat Case

One case that Agrokor could be compared to would be the infamous Parmalat case that shook Italy – and the similarities are uncanny.

As Poslovni Dnevnik writes on the 15th of January, 2018, unlike what took place in the handling of the infamous Parmalat case, there are no individual restructuring plans for particular companies in Agrokor. The comparisons of the work of the extraordinary administration teams of Italy’s Parmalat and Croatia’s Agrokor were published on the Agrokor Shareholders’ portal.

In case the details of the huge Parmalat case escape you, the Italian multi-national food and dairy corporation was founded back in 1961, it collapsed in 2003 after 14 billion euro was found to be missing from its accounts. Although Parmalat eventually regained its reputation, ending up becoming a subsidiary of France’s Lactalis company in 2011, the case carries a stigma and is still hailed as the biggest bankruptcy Europe has ever seen. Read more details here.

Much like Ivica Todorić, who had appeared in the glossy pages of Forbes magazine and was something of an enigma in Croatian society, Parmalat’s founder, Calisto Tanzi, an equally formerly untouchable figure, an image of envy and the picture of financial success, was arrested after his firm was declared insolvent. The suddenly weakened former boss admitted that there was indeed an 8 billion euro hole in the company’s accounts, and much like Todorić, he denied that anything underhand or illegal had ever taken place.

Much like what happened with the arrest of Todorić’s former associates from Agrokor’s ex administration body before he himself was detained in London, five high flyers from Parmalat were detained. Auditors came to the eventual conclusion that Parmalat’s incomprehensible debt actually amounted to a massive 14.3 billion euro, almost eight times the amount that had been originally stated.

The shocking scandal rocked Italy and saw Parmalat’s shamed founder charged with not only financial fraud, but money laundering, after it was discovered that the Italian company had sold itself credit-linked notes under his administration. Tanzi eventually admitted to the charges he faced and was sentenced to ten years in prison for fraud. Other defendants in what had become a huge case were either acquitted of their charges or dismissed entirely.

Many comparisons between the processes that occurred within both Parmalat and Agrokor can be drawn, and the similarities between the charges and accusations that both Tanzi and Todorić face are uncanny. Find out more details about how Agrokor threatened to bring the entire Croatian economy to its knees here.

While the Agrokor and the Parmalat cases are strikingly similar, if we take a closer look at the comparisons between Agrokor’s and Parmalat’s extraordinary administration practices, some radical differences clearly indicate that certain processes in Agrokor are being done outside of the general interest. The Agrokor Shareholder’s portal outlined some of the most confusing processes being carried out under Ante Ramljak’s administration team, here is a look at a few outstanding ones:

Agrokor
The government appointed extraordinary commissioner has pledged not to challenge the guarantees

Parmalat
The extraordinary commissioner disputed over 500 claims, most of which were secured by guarantees

Agrokor
The extraordinary commissioner has agreed not to challenge any given guarantee of the subsidiaries, even one which wouldn’t have been granted had the extraordinary administration procedure not opened

Parmalat
The commissioner disputed, ie, rendered invalid, all the insurances which, by virtue of the normal course of the case, didn’t come to an end at the time of the opening of the extraordinary administration procedure

Agrokor
The commissioner did not dispute any claims from American investment banks

Parmalat
The commissioner disputed Citigroup’s claims before the New Jersey court of law, as well as claims from UBS and from Deutsche Bank

Agrokor
The commissioner didn’t specifically call any of the claims of any special group of creditors into question

Parmalat
The commissioner specifically focused on challenging the claims of investment banks and lenders

Agrokor
The commissioner awarded ”obedient” directors who signed roll-up loans with clearance

Parmalat
The commissioner initiated compensation procedures for the directors of companies who didn’t perform their fiduciary duty to act in good faith

Agrokor
In the plan, all dependent companies that have accessed the guarantees are treated as insolvent

Parmalat
Companies with negative capital were visibly treated differently than those who had positive capital

Agrokor
There are no individual restructuring plans for individual companies

Parmalat
A number of companies were restructured on an individual level through an individual plan

Agrokor
All local subsidiaries apply Lex Agrokor’s provisions

Parmalat
Insolvency rules of local countries were applied to a number of companies

Agrokor
Shares of “new holdings” will be restricted to “existing creditors and a predetermined list of potentially eligible investors”

Parmalat
“New holdings” were listed on the Italian Stock Exchange

Agrokor
No emissions are planned

Parmalat
Emissions were made and used for settlement

 

Will Agrokor manage to get back on its feet in the same manner Parmalat miraculously did? With such indescrepancies, only time will tell.

 

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