Pune, Aug 31: Italian milk products major Parmalat SpA beat a hasty retreat from India by winding up Swojas Energy Foods Ltd. Despite stiff resistance from angry shareholders at the annual general meeting and the extraordinary general meeting later, Swojas Energy was wound up on Thursday. Parmalat was able to push through the resolutions, almost all of which went to the polls, because of its majority stake of 74 per cent. The company was not forthcoming with any information and barred members of the media to attend the meeting. They also refused to talk to the press later. Many of the shareholders complained of not receiving the annual report, which the company claimed it had posted. Citibank, ICICI Ventures and SIICOM were among the institutions that had initially funded the Swojas venture. Swojas Energy Foods was listed on the Pune, Bombay and Ahmedabad stock exchanges.A $10 billion company, Parmalat is the second largest milk products firm in the world but could not get its act together in India, which is the largest producer of milk in the world. Parmalat had pumped in Rs 24 crore into the company in two stages and had ambitious plans of establishing the Parmalat brand in the country. Parmalat initially picked up a 51 per cent stake in Swojas and later took the stake up to 74 per cent. Shareholders complained bitterly about the company's attitude of stonewalling queries and poor communication.
Former chairman and managing director Giorgio Lacovara had told shareholders last year that "Parmalat was in India for the long haul."
Presiding over the meeting, Fortunato Guadalupi, chairman and managing director, said that the decision to wind up the company was made two to three months ago. He told shareholders that all possibilities were explored but it failed. Production was stopped in May 2000. The company constantly hinted at the "legacy" it had inherited from the Shah family, the original promoters of Swojas Energy.
Swojas was a loss making entity when it was taken over and Parmalat was unable to make any impact with the company's losses mounting to Rs 26 crore.
The MMPO and rising prices of milk, availability and poor quality of milk was cited as reasons for making losses. Attempts at outsourcing too came to naught.
Parmalat SpA's nominee director Alberto Ferraris, who attended the meeting, was asked about Parmalat's plans and whether the company would get into India via another 100 per cent owned company. Feraris said it was not the right place to talk and on his agenda was only winding up Swojas Energy Foods.
Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.