Parmalat’s Civil Claim Of $2.2 Billion Against Citigroup Thrown Out

Citigroup has announced that a court in Italy has rejected a civil claim of $2.2 billion that had been filed by food company Parmalat following the firm’s collapse 15 years ago. Per a statement issued by Citigroup the court in Milan dismissed the lawsuit that had been filed against some of Citigroup’s former employees and Citigroup itself in June 2015.

According to the Milan court the suit was a duplication as a similar case that had been heard in New Jersey and which was dismissed in 2008. In a statement Parmalat has said that it will file an appeal. The lawsuit by Parmalat had accused Citigroup of colluding with employees of the food company to obtain financing that was used in fraudulent transactions before the collapse of the firm in what is still the biggest bankruptcy in Italy. Calisto Tanzi, the founder of the company, was later convicted for misleading investors before Groupe Lactalis, a French cheesemaker, acquired the Italian food firm.

Unrepaid loan

While Parmalat’s civil claim was not successful a complaint that had been filed by Citigroup in New Jersey was ruled in the lender’s favor. Citigroup was seeking from Parmalat approximately $431 million for credit that had yet to be repaid. After a court in New Jersey ruled in Citigroup’s favor an Italian court also stated that the sentence would be recognized in Parmalat’s home country.

The rejection of a civil claim against Citigroup by a Milan court comes in the wake of the lender saying that this year will be one of the best with regards to investment banking in Africa and the Middle East in a decade. According to a senior Citigroup executive, Saudi Arabia is likely to be one of the shining stars. Other countries with particularly good prospects include Egypt, United Arab Emirates and Nigeria.

High GDP growth

The growth would be driven by a pick-up in public share sales, mergers and acquisitions as well as bond sales, according to the investment banking head of Citigroup in Africa and the Middle East, Miguel Azevedo.

“GDP growth for advanced economies this year is between 2.5 and 3 percent, while for emerging markets it is between 4.5 and 5 percent. For investment banking, the growth should maybe be even more,” said Azevedo.

Last month Citigroup disclosed that it had received formal approval from the Capital Market Authority of Saudi Arabia to start an investment banking unit there following an absence of more than a decade.

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