Family skates on thin ice after freeze

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The Independent Online
MILAN (Reuter) - The Ferruzzis, considered Italy's second-richest family until financial scandal dismantled their empire, have been reduced to penury by a court freeze on their assets, their lawyer said yesterday. 'They cannot even pay the electricity bills or put petrol in the car,' Francesco Galgano said.

Earlier this month a Milan court ordered the temporary seizure of up to 3 trillion lire (pounds 1.26bn) of assets belonging to the family and former senior group managers.

The order had been sought by creditor-appointed managers at the family holding Ferruzzi Finanziaria and its main industrial arm, Montedison, who suspect fraud in the losses run up by the group. Mr Galgano said the order had frozen the family's bank accounts throughout Italy, leaving them without funds to pay even household bills.

Describing the order as a 'piece of theatrics', he said it went against the spirit of the pledge given by the family to creditor banks that they would make no big financial moves without consulting them.

The Ferruzzi group, which mushroomed from an obscure grain trader into an international industrial conglomerate during the 1980s, called in its creditors in June, saying it could no longer keep up payments on debts of 28 trillion lire. The creditor-appointed managers subsequently discovered hundreds of millions of dollars of undeclared losses hidden in offshore companies. The Milan court will make a final ruling on the asset freeze by September.

The family blames the former Ferruzzi chief Raul Gardini, who committed suicide last month, for the debacle. It says he ran up huge losses trying to corner the Chicago soya bean market in the late 1980s.