The health and socio-economic disaster caused by Covid-19 has distracted public attention from various other phenomena. These include the recent merger of the Italian Agricultural Consortiums into the Consorzi Agrari d'Italia SpA (CAI).
An articulate 'dossier dei poeni 'denounces violations of the law and conflicts of interest in an operation renamed' Federconsorzi 2 ', with good memory of crack financial affair that overwhelmed Italian agriculture in 1991. The anonymous report runs on social networks of sector operators, for some weeks now.
Attached is the dossier and a summary of it is reported in the following article, with the benefit of an inventory. We invite those who have detailed information to want to share them, to help us understand if and to what extent this relationship is actually founded. Information crowdsourcing.
Agricultural Consortiums of Italy SpA, CAI. The dossier poisons
Il dossier poisons is dedicated to Consorzi Agrari d'Italia SpA. Subtitle, 'the theft of farmers' assets through the spin-off of the activities of the Italian Agricultural Consortiums and the strengthening of the position of Bonifiche Ferraresi SpA in the agricultural sector'. The summary refers to:
- 'an illicit private and financial interest, conducted with tools and purposes that have nothing to do with agriculture',
- 'an intertwining between Coldiretti, a pool of votes if necessary for the various political forces, and Federico Vecchioni, CEO of Bonifiche Ferraresi',
- the 'complicity of some parts of the state', the immobility of politics, the silence of the press and of the institutions. 'The presence of Cassa Depositi e Prestiti (CDP), among the shareholders of Bonifiche Ferraresi SpA', e
- too many conflicts of interest with the participation of the same subjects between subsidiaries and parent companies.
CAI, a 'new' Federconsorzi? The complaint
The CAI operation is described, already in the summary, as'the creation of a new company that will swallow the Agricultural Consortiums illegally, placing it as a "new" Federconsorzi '.
It refers to 'illegitimate choices, which contrast the mutuality of agricultural consortia and lead to a depletion of the powers of the assemblies of the Consortium Members, the consolidation of turnover in a company with seriously loss-making financial statements'.
A 'crime towards the agricultural world ', concludes the summary with a question. 'Why are the authorities called to supervise, the Ministry of Economic Development, the Ministry of Agriculture, Consob not doing it?'
Federconsorzi, a tragic story
Federconsortia (1892-1981) was founded in 1892 as a second level consortium, to strengthen its bargaining power through collective purchases (eg agricultural machinery). It had a decisive role both in supporting the agrarian reforms of the fascist era, and in managing the funds allocated by the Marshall Plan (European Recovery Programme). The founder of Coldiretti Paolo Bonomi, a Christian Democrat parliamentarian, assumed power in 1948.
The huge bandwagon - cockpit of the Italian agricultural policy, amidst clientele and corruption - was wrecked in 1991. His crack financial was never punished by the Italian judiciary, although serious responsibilities emerged from the heads of Coldiretti and Confagricoltura, who headed Federconsorzi. (2) This was followed by the sale of a huge fortune, at a price so vile as to dissolve about 1 billion euros, and the loss of over 1.500 jobs.
Federconsorzi 2, ambition and legal limits
La holding Agricultural Consortia of Italy was established as a consortium company (SCpA) at the end of 2009. It brings together 21 agricultural consortia with a turnover of approximately 3 billion euros. According to the authors of the dossier, Ettore Prandini, president of Coldiretti since 2018, would have collected the interest of Federico Vecchioni (former president of Confagricoltura, managing director of Bonifiche Ferraresi SpA) in the idea of 'develop a large pole for Italian agriculture that would face large multinationals'.
The law on consortia agrari issued following the crack Federconsorzi (law 410/1999 and subsequent amendments) also requires that the consortia:
- are organized as cooperative companies with prevalent mutuality and limited liability (law 99/2009, art.9),
- pursue mutualistic purposes, by offering goods and job opportunities at more advantageous conditions than those of the market,
- can participate in joint stock companies, on condition that they hold the majority of votes in the ordinary shareholders' meeting (Legislative Decree 91/2017, article 2.3).
Federconsorzi 2, the project
The Agricultural Consortiums of Italy SCpA, in July 2019, presented the project to establish CAI SpA, with the participation of the 6 large Agricultural Consortiums. North-east, Terre Padane, Emilia, Adriatic, Center-South, Tyrrhenian. And the joint stock company Bonifiche Ferraresi (BF).
The project , as reported in the dossier, provides:
- sale of the interest-bearing business branches of the Consortia (production and / or distribution of agricultural commodities and services, including real estate and capital goods, personnel and working capital) and their transfer to the new Consorzi Agrari d'Italia Srl,
- spin-off of the real estate capital of the Agricultural Consortiums and related debt, to be transferred to Consorzi Agrari d'Italia Real Estate Srl,
- transformation of the aforementioned CAI Srl into Consorzi Agrari d'Italia SpA. With shares subscribed by the Consortia through the aforementioned contributions, by Bonifiche Ferraresi SpA with a capital increase of € 61 million.
Governance and asymmetries
The investment agreement signed in 2019, it is still read in dossier, indicates the maximum shareholding of BF in the capital of CAI at 49,9%. The shareholders' agreement also provides for the participation of BF in the Board of Directors of CAI in a share equal to the Agricultural Consortia.
La governance of the Consorzi Agrari d'Italia SpA would however be asymmetrical, in favor of the minority shareholder. In fact, the crucial decisions would depend on the managing directors of Bonifiche Ferraresi SpA. Business plan, approval of financial statements, distribution of profits. And the CEO, by appointment of BF, would have the casting vote in the event of a tie by the BoD on any board resolution.
Illegitimacy reported
'Substantial control of Newco [CAI] reports to the apparently minority shareholder who consolidates the Newco in its balance sheet', the report continues. Where it is deduced, among other things, the illegality of the consolidation of the accounts of the subsidiary with the civil code, in the absence of the control conditions provided for therein (art. 2359 of the civil code).
The unbundling of the business units crucial for the Agricultural Consortiums has moreover an impact, in the complainant's opinion, on their statutory corporate objects and the rights of the members. With a substantial renunciation of the mutual objectives in favor of the shareholders and the removal of the activities - among other things - from the control of their assemblies. Not even called to express themselves on the matter.
Family business?
The story becomes hot when the report indicates the composition of the Board of Directors of Consorzi Agrari d'Italia SpA, appointed on 8.7.20 for the period 2.9.20-31.12.22. And to the remuneration of its members. The attention focuses on:
- managing director, BT Srls (share capital € 2.000). Which refers to belonging to Gianluca Lelli, Head of the Economic Area of Coldiretti,
- managing director, ELSE Srl (share capital € 1). The property of which is instead attributed to the family of Federico Vecchioni, its administrator.
The 'family business' they would go well beyond the reasonable fees (of 250 thousand and 200 thousand euros, respectively). The extraordinary meeting of CAI 1.9.20 would have in fact decided to recognize an 'extraordinary remuneration' commensurate with the value of the most important transactions:
- in favor of BT, 1,5% of the value of the capital operations carried out by CAI,
- in favor of ELFE, 1,5% of the value of all extraordinary financial transactions. Including mergers and acquisitions (M&A, Merger & Acquisition), in relations to which the director himself would have received extensive delegation.
Conflicts of Interest?
In practice, as reported in the report:
- the senior manager of Coldiretti Gianluca Lelli would receive 1,5% of the value of the contributions of each Agricultural Consortium that will adhere to the Consorzi Agrari d'Italia SpA,
- the managing director of Bonifiche Ferraresi SpA (BF), Federico Vecchioni, would receive 1,5% on each 'acquisition' of new consortia, as well as on other extraordinary finance operations of CAI. Including those involving public bodies, including for example the Cassa Depositi e Prestiti (CDP, in turn a shareholder of BF).
In the first few months year of Consorzi Agrari d'Italia SpA, the companies of Lelli and Vecchioni would have thus earned approximately 3 million euros, according to what is set out in the report.
Audit, conflicts of interest?
The audit of the Consorzi Agrari d'Italia SpA is instead entrusted to the newborn Agrirevi SPA. Whose reputation is certainly not comparable to that of leader sector historians, but is characterized in the report by three illustrious personalities:
- the president Raffaele Grandolini, 'point man of Coldiretti at the head of the administration of the Confederation and administrator of Filiera Agricola Italiana SpA’,
- the managing director Enrico Leccisi, 'in the past CEO of Creditavi you trust Coldiretti and (...) trusted by Vincenzo Gesmundo the ras of Coldiretti’,
- the shareholder Gabriele Papa Pagliardini, 'general manager of the State agency AGEA which disburses contributions to farmers through the Authorized Agricultural Assistance Centers - CAA '.
Mathe role of general manager of such an important agency and that of shareholder of a company attributable to Coldiretti, which benefits from these funds', it's possible? Could it be true?
Bonifiche Ferraresi SpA (BF)
One chapter of the report is dedicated to Bonifiche Ferraresi SpA. Founded in 1872, BF is the first landowner (6500 hectares) and the first agricultural company in Italy. In arrangement with creditors until 2014, it was taken over by a group of entrepreneurs coordinated by Federico Vecchioni in BF Holding, which he himself manages.
Among the shareholdersAccording to the report, the Cariplo Foundation (23,6%), CDP (Cassa Depositi e Prestiti) -Equity (21,49%), Sergio Dompé (11,82%), the Gavio family (6%) are included. Sergio De Benedetti would have sold his stake (14,6%) to a company attributable to Federico Vecchioni. Which would hold 10,48% of the BF shares, through the companies ELFE Srl and Arum SpA.
BF and SIS (Italian Seed Society)
The financial statements of BF are described as'a masterpiece of managerial inability and accounting cunning (...) increased thanks to acquisitions and extraordinary operations that have concealed mismanagement'. Extraordinary operations such as that of the Consorzi Agrari d'Italia SpA, with an estimated value of € 1,5 billion. The 2019 financial statements - net of accounting for capital gains and capitalization of internal costs - would have closed with a loss of € 10 million, according to the authors of the dossier.
'The only profitable company in the galaxy BF ' it would be SIS, the Italian Seed Company, which contributes more than 51% to the consolidated revenues of Bonifiche Ferraresi SpA. SIS - is famous throughout the world for managing the production of Senatore Cappelli wheat in a monopoly'- was owned by the Agricultural Consortiums, in Coldiretti orbit. Who sold control (42,2% of the shares) to BF for only 8 million euros. A real bargain, which can perhaps find a motive by looking more closely at the team of Federico Vecchioni's partners.
BF and Arum SpA. Family business?
Arum SpA (from the name of the wild calla or snake's pan, a poisonous herbaceous plant) - partner of Bonifiche Ferraresi Spa (BF) isobviously chaired by Federico Vecchioni', as stated in the dossier - in turn, it would boast illustrious partners, through other Chinese boxes:
- Agricola Quadrifoglio Srl. The report refers its ownership to Ettore Prandini, making fun of the homonymous with the president of Coldiretti and the North-East Agricultural Consortium,
- Progresso Srl. It is the company of Lucia Liturri, the same name as the wife of Enzo Gesmundo, 'ras of Coldiretti and deus ex machina of the reorganization project of the Agricultural Consortiums'?
- CC Holding Srl. Is it the company of Claudio Costamagna, former president of Cassa Depositi e Prestiti, who invested precisely in Bonifiche Ferraresi SpA?
Some questions
The questions raised by the authors of the dossier in any case they deserve an answer, in order to clarify issues of relevance and public interest. In particular, because:
- the MiSE, Ministry for Economic Development, does not exercise its duty of supervision over agricultural consortia (pursuant to Legislative Decree 181/06, Article 1.9-bis), despite the requests received from numerous Consortia on the CAI case?
- it is true (and if applicable, admissible) that the sale of the company branches and the entry into CAI of the first four Consortia (Terre Padane, Adriatico, Centro-Sud, Tirreno) was decided by the boards of directors, rather than by the shareholders' meetingswho are the beneficiaries of the consortium mutuality? '
- is it true and, if any, legitimate that the turnover of the Consortia is consolidated in the financial statements of the minority shareholder Bonifiche Ferraresi SpA (BF)? 'Why do farmers' profits go to BF? What impact does this operation have on the shares of BF (listed company) and who benefits from it?'
AAA. Freedom of the press and democracy wanted, Italy
Reporters Without Borders places Italy in 41st place, in its 2020 global ranking on freedom of the press. After Ghana and Burkina Faso, among others. The writer has repeatedly denounced the fake news systematic, precisely in the food sector (3,4).
Italian democracy it is itself seriously compromised, as shown by the Democracy Index 2019 by EIU (Economist Intelligence Unit), based on 60 indicators relating to five themes (electoral process and pluralism, civil liberties, government functioning, political participation, political culture).
Provisional conclusions
Agricultural Consortiums of Italy SpA the urgent activation of investigations and inquiries by all the competent authorities and bodies deserves. The risk for the country - once again, as happened in the case of the first Federconsorzi - is that the project will soon reach the size of the 'too big to fail'. With the classic epilogue of the privatization of profits (in favor of the usual suspects, before the bubble burst) and the socialization of losses (for the community, after the outbreak).
It is time for reforms, to ensure efficiency and governance in the public administration and at every level of government above all (5,6). Reforms of the institutions but also of the trade union, which in this affair seems to be the invisible puppeteer. Representing which democratic interests?
Dario Dongo
Footnotes
(1) 'Dossier Consorzi Agrari d'Italia SpA. December 2020. The theft of farmers' assets through the spin-off of the activities of the Italian Agricultural Consortiums and the strengthening of Bonifiche Ferraresi SpA's position in the agricultural sector'. V. ATTACHMENTS
EXPOSED AGRICULTURAL CONSORTIUMS OF ITALY - PART I
EXPOSED AGRICULTURAL CONSORTIUMS OF ITALY - PART II
EXPOSED AGRICULTURAL CONSORTIUMS OF ITALY - PART III
(2) The final report of the Ministerial Commission of Inquiry, ordered by the then Minister for Agriculture Adriana Poli Bortone, in June 1995, also highlighted the responsibilities of the ministries involved, for failure to supervise
(3) The dependence of the Italian press on Coldiretti has reached grotesque levels, to the point of hitting unsuspected journalists including Milena Gabanelli, as we have seen (https://www.greatitalianfoodtrade.it/idee/igine-pomodoro-la-fake- summer-news)
(4) The writer has also been intimidated by the Mi.PAAF And he had to successfully defend himself, in civil and criminal judicial offices, for having opposed the government fake news piloted by the usual suspects (see https: // www. greatitalianfoodtrade.it/etichette/sede-stabilimento-decreto-inapplicabile-per-il-tribunale-di-roma)
(5) A chapter of dossier which is also worthy of attention concerns the survival of Federconsorzi upon its dissolution by law (law 410/1999, article 5.2). Ironically, its commissioner Andrea Baldanza is v. Cabinet chief of the MEF under the leadership of Roberto Gualtieri. In inter-ministerial conflict of interests, among other things. See attached report, pages 16,17
(6) Fabrizio Barca, Patrizia Luongo. A fairer future. Il Mulino, Bologna, 2020
Dario Dongo, lawyer and journalist, PhD in international food law, founder of WIISE (FARE - GIFT - Food Times) and Égalité.
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