Transferred the funds that obtained from the issuance

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transferred the funds that obtained from the issuance through related parties to other companies which the Tanzi family is fully controlled, use financial derivatives and complex financial transactions to conceal liabilities. 3.2 ANALYSE OF THE CASE 12 | P a g e
Corporate Governance: A Case Study On Parmalat Student Name The focal issue, in this case, is that the Board of Directors of overlaps with the Enterprise Management. Parmalat is a case in an Italian family enterprise. The Board of Directors has been put into long-term control of the Tanzi family since the ownership is concentrated in the Tanzi family, and Calisto acted as both the chairman of the board and the CEO of the company. Francesco Giavazzi (2005) pointed out that no one in the Parmalat board is truly independent of the Tanzi family and the scandal may not occur if there are one or two outside directors. Despite the fact that the company has the establishment and appointment of managers in each department of the company, the family still has the most right in the company. For instance, Tanzi's son, Stefano, is the marketing director of the company, and his daughter, Francesco, runs a family travel company. His brothers and nephews also act as critical positions in the company. The result of family control by the board of directors caused fundamental corporate governance problems. 13 | P a g e Figure 3.2 Directors in Parmalat
Corporate Governance: A Case Study On Parmalat Student Name First, the Board of Directors has ultimate responsibility for its management and performance but the operational risks were undertaken by most minority shareholders in this case. At Parmalat, the major shareholder and the board of directors overlap with the Enterprise Management. Regardless of the fact that it is referred to as a listed company, it is no different from a sole proprietorship. The success or failure of a sole proprietorship company is undertaken by the sole proprietor. However, for a family-controlled listed company, its business risk is made by most individuals and other shareholders. Theoretically speaking, the higher the shareholding of shareholders, the more enthusiastic they may be to participate and supervise the operation of the company in order to enhance individual interest. However, it will utilize the resources of listed companies to enhance the interests of family shareholders and finally once it is beyond the separation of ownership and control. Finally, sacrificing individual investors and other shareholders. A typical example is that Calisto used Parmalat’s subsidiary companies (Curcastle and Zilpa, 2005) to transfer funds. Firstly, Calisto appointed someone to make erroneous certification documents to show that these companies were in debt to Parmalat. Secondly, Parmalat gave money to the two companies. Finally, the two companies paid “debt” to a subsidiary company fully controlled by the Tanzi family according to the fake contract.

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