Obituary: Raul Gardini
Saturday 24 July 1993
FOR almost a decade, Raul Gardini was one of Italy's most powerful and most admired businessmen. The Italians were proud of the glamorous, silver-haired, sun-tanned millionaire, regularly photgraphed at the helm of one of his racing yachts, who epitomised the good life and propagated an image of an Italy that could beat the world.
Until the death of Serafino Ferruzzi in a plane crash in 1979 hardly anyone had heard of Raul Gardini. For that matter, even in Italy hardly anyone had heard of the Ferruzzi group either, even though the family fortune included an agricultural empire covering some 2.5 million acres in Italy, the United States and Southern America. Soon all that was to change.
For more than 20 years, Raul Gardini, the son of a wealthy landowning family, who had married Serafino Ferruzzi's daughter Idina, had been the patriarch's closest collaborator. He had learnt, worked and argued with the old man. But Gardini was a man with a vision, who dreamed of turning the company into an industrial giant. Legend has it that, after the patriarch's death, Gardini approached the family with an offer: 'You must decide now if you're willing to let me do things my way and give me total control,' he said, 'or if, instead, you just want to remain a wealthy provincial family'. The Ferruzzis unanimously agreed to let him take control.
At first, in 1980, Gardini took control of Beghin-Say SA, the French sugar and paper company, turning Ferruzzi into Europe's leading sugar producer. Then, in 1985, Gardini focused his interest on chemicals and began buying stock in the Montedison chemicals group. By 1987, Ferruzzi had acquired 42 per cent of the group, turning Ferruzzi-Montedison into Italy's second largest industrial group. Gardini became one of the stars on the Italian corporate scene and was nicknamed Il Contadino ('the peasant') by the Italian press.
In the process of acquiring Montedison, Gardini had accumulated enormous debts. So, in an attempt to restructure the group by merging the two companies, Gardini offered some Montedison shareholders shares in the Ferruzzi family holding company, Ferruzzi Finanziaria. The market didn't seem impressed by Gardini's operation and both Ferruzzi and Montedison stock plunged downwards. Gardini was rescued by Enrico Cuccia, the powerful chairman of the merchant bank Mediobanca, who stepped in to guarantee the deal.
When international investors remained unimpressed, Gardini's response was that 'This is an Italian operation in the Italian market and I don't care if it is criticised on the basis of international criteria.'
After such a display of ruthlessness and arrogance some financial observers quickly gave 'the Peasant' a new and less affectionate nickname, 'Il Corsaro' ('the Pirate').
In June 1989, the ink sanctioning the birth of Enimont, a joint venture between the state-owned Enichem Chemicals Company and Montedison, was hardly dry, when Gardini stirred up a new row. Not content with having obtained a tax break of more than L825bn and shifting L3,800bn of debt to the combined entity, Gardini announced he was going to seek full control of the company.
The affair ended on 22 November 1990, with Montedison receiving a payment of L2,805bn for its 40 per cent of Enimont, a net gain of more than L1,100bn. In the meantime, Gardini had fought bitterly with the entire political class, with ENI (Ente Nazionale Idrocarburi), the huge state-controlled energy and chemicals group that was Enichem's parent company, and had broken off relations with Banca Commerciale Italiana (Comit), the family bank, after accusing the bank's management of being in the hands of the politicians.
In December 1990, relinquishing all his managerial powers, Gardini left Italy in a huff for San Diego to play with his costly new America's Cup yacht, an adventure that is believed to have cost Montedison dollars 100m. Gardini further dismayed the Ferruzzis by appointing his 22-year-old son Ivan to the presidency of Ferruzzi Finanziaria (Ferfin), the holding company in control of the family empire.
Upon his return to Italy in May 1991, Gardini presented to the Ferruzzis a reconversion plan that would have given him total control of the family empire. But on the evening of 11 June 1991, just when Gardini's return to power seemed imminent, a brief communique announced that the 51-year-old Arturo Ferruzzi had taken control of Serafino Ferruzzi srl, the family holding company.
A few months later all links had been definitively severed between Gardini and the Ferruzzi-Montedison group. Serafino Ferruzzi's heirs had decided it was no longer possible to let Raul do things 'his way'. He had made too many enemies.
With the money his wife received from the Ferruzzis for her stake in the business, Gardini set up his own group, with interests in the food and mineral water industry, mainly in Italy and France.
Last June it was revealed that Gardini's reckless expansion drive had left Ferruzzi choked by almost dollars 20bn in debt. The family was forced to relinquish its controlling stake in the group and turned to a consortium of banks to bail it out.
The Italian press revealed that the Milan magistrates handling the 'Clean Hands' corruption investigation were examining allegations that, at the time of the break up in November 1990, Enimont was overvalued when it was sold back to ENI. Furthermore, the investigators suspected Enimont had paid some dollars 40m in bribes to the Christian Democrats and Socialist parties.
Two days ago, according to transcripts of his interrogation released to the press, Giuseppe Carofano, a former Montedison chairman, had told magistrates that Gardini had ordered him to create a slush fund to pay off politicians. Carofano also blamed Gardini for some dollars 202m of extra losses in Montedison's balance sheet.
Raul Gardini was the quintessential business buccaneer of the 1980s and a typical member of the Italian system in which a few powerful families dominated the country's private sector. These family-run businesses prospered largely thanks to a web of intricate relations with Italian politicians based on generous contributions to party coffers, and the politicians own pockets.
Until recently, the politicians and the businessmen felt virtually invulnerable. No one in Italy imagined the system was about to be ripped apart at the seams.
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