40 Million Euro missing from Volare Group accounts

[Yaw String]

As reported by KPMG London, called in by the current Volare management to check the books over the past 3 years. Doubts about the past managements practices have always been voiced, including flights where pilots who were sitting in offices at the time were nominated as operating crew in order to complete more sectors than allowed by the law-all alleged of course!
So, I always wonder where the money comes from to fund a start up airline....perhaps this is the answer!!! The cell door is waiting to close...just missing a name!

[pug munter]

Why would an Italian company call in British accountants?

[Re-Heat]

KPMG is a global firm with offices in many countries. It is also, I believe, actually Dutch. Mention is of KPMG, rather than KPMG London, unless perhaps some forensic accountants from London were also involved?


22 September 2004
Il Sole 24 Ore

Italian airline group Volare reportedly misstated its accounts in the last three years to the tune of at least 40m euros, sources close to the company say, as auditors KPMG, appointed by Volare's new management, near the end of their review of the group's financial statements.

The figure is likely to affect plans for the group's restructuring, which has so far centred on the need to raise 90m euros to keep Volare afloat. Giorgio Fossa, the Volare chairman who called for the KPMG review, stepped down several weeks ago after failing to raise the money from shareholders, who yesterday announced the appointment of former banker Mauro Gambaro to replace him. Shareholders also moved, yesterday, to grant the group a 30m-euro bridging loan, followed by a 60m-euro capital injection by the end of the year. Since most of Volare's debt is toward suppliers rather than banks, shareholders expect the company to repay the bridging loan by obtaining new credit lines in future. However, debt figures could rise following KPMG's final assessment, expected in two or three weeks. Mr Gambaro has nonetheless pointed out that the group is operationally healthy and generates cash flow.

Original article by Fabio Tamburini

Abstracted from Il Sole 24 Ore



9 September 2004
Il Sole 24 Ore


Shareholders of loss-making Italian airline group Volare Group yesterday voted to postpone a planned rights issue to shore up the balance sheet, after the group\'s new chairman Giorgio Fossa reportedly appointed auditors KPMG to assess its 2001, 2002 and 2003 accounts for possible irregularities.

Volare Group, which is the parent company for Volare Airlines, Volare Web and Air Europe, had 300m euros of debt at the end of 2003 and a net loss of 45m. The group already underwent an 80m-euro recapitalisation six months ago which saw the arrival of Argentine entrepreneur Eduardo Eurnekian as a new shareholder, but has apparently continued to burn cash. Initial estimates put the figure for a second rights issue at 50m to 70m euros, but sector sources have recently suggested that it could reach 130m. Now, the figure is most likely to depend on the result of the KPMG review. Meanwhile, sources say that Mr Fossa has also been in talks with investment bank Lazard.

Original article by Simone Filippetti

Abstracted from Il Sole 24 Ore

[Yaw String]

Forensic accountants from the London branch are involved. It will be an interesting outcome.

[pug munter]

In the past, insiders in Volare have usually commented on threads about their employer, and some comments have been quite illuminating.

Is this now a case that there is a negative atmosphere in Volare and nobody wishes to rock the boat - or be caught doing it?

Are the Alitalia problems a potential benefit for them?

If, as others say, there is now a major, and possible fraud, investigation into the management at Volare, does this mean that no further investors will go near it until resolved? If so, time now to start the wake if the cashflow is as red as described. Once the paychecks slow up.......time to go.

Pug