It emerged this week that troubled Italian dairy firm, Parmalat Finanziaria SpA has reached a settlement agreement with the US Securities and Exchange Commission over claims that it defrauded investors in the US and artificially inflated its assets in order to conceal its true financial situation.
Under the terms of the agreement, which must now be approved by the Manhattan federal court, Parmalat will not face a fine, since this could hurt US investors who are set to receive shares in the reorganised firm in exchange for debt, but will be obliged to make significant improvements to its corporate governance.
To this end, the SEC settlement requires that the firm permanently splits the roles of chief executive and chairman, and that it appoints independent directors to serve specified terms. Additionally, Parmalat must adopt a code of ethics and put in place strict restrictions in order to prevent insider trading.
.Tags: Italy | Italy
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