Furious shareholders berated management at the annual meeting for not warning them about the dire straits into which the company had sunk over its L31,000bn (dollars 20.6bn) of group debt. The crisis has led to creditor banks taking over management of the group and preparing a plan to save it.
The downfall of the family was sealed at the meeting by the resignation of Arturo Ferruzzi as chairman of the company and Carlo Sama, his brother-in-law, as chief executive.
The chairman, who also left the board, is the only son of Serafino Ferruzzi, who built up a backwater grains business which another brother-in-law, Raul Gardini, later turned into a giant conglomerate.
Before he stepped down Mr Sama delivered a further blow to shareholders, whose investments have more than halved in value in less than a month.
According to figures released at the meeting, Ferruzzi Finanziaria's short-term debt soared to L4,600bn by the end of May from L1,240bn at the end of last year. Debt figures for the galaxy of companies controlled by Ferruzzi were not available, nor was an explanation of the sudden sharp rise.
Ferruzzi shares crashed a further 10.43 per cent to L446.50 yesterday on the Milan bourse.
The crisis over Ferruzzi's debts proved too much for some shareholders, who travelled to the meeting and criticised the group for hiding the facts.
But Mr Sama defended the massive debts, incurred when Ferruzzi went on a buying binge up to last year. 'The investments of the past two years were not folly of grandeur,' he said. 'They were necessary to compete on international markets.'
The meeting appointed Enrico Bondi, a former industrial chemist, and Guido Rossi, an ex- chairman of the bourse regulator Consob, as new board members.
Earlier this week Montedison, Ferruzzi's industrial arm, said its 1992 losses had been about 30 per cent higher than at first announced.Reuse content