MILAN — Matteo Marzotto’s lawyers during Friday’s tax trial hearing highlighted once again the defendant’s unwillingness to sell the Valentino brand in an attempt to underscore how removed he was from any tax evasion plan.
“Marzotto spoke to the press transparently,” said his lawyer Alessandra Mereu, quoting extracts from newspaper clips such as “I am keeping Valentino” and “I believe in this company.” Mereu said Marzotto’s stance also derived from pure economic reasons. “He knew it was not a deal to sell at the time, because he knew the company from within and knew how much bigger it could become. We pale if we look at the figures [now],” the lawyer said.
In 2014, Valentino sales totaled 664 million euros, or $883.1 million, and chief executive officer Stefano Sassi said in September last year that he was expecting to hit sales of one billion euros, or $1.1 billion, by the end of 2015.
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The allegations involve the Marzotto family’s association with the sale of the Valentino Fashion Group to private equity fund Permira in May 2007 for more than 782 million euros. According to the indictment, taxes on the profit derived from the transaction were never paid in Italy.
Mereu said she “had a hard time finding objective traces” of Matteo Marzotto and his sister Diamante Marzotto linked to International Capital Growth, which the Italian tax police believe is a fictitious entity based in Luxembourg and managed in Milan, and allegedly created for the purpose of selling 29.9 percent of VFG. The siblings were indicted with other defendants for alleged omission of earnings declaration and tax evasion.
“Matteo Marzotto is totally absent from ICG, there are no signatures, no mails. The only episode is a letter from Nov. 28, 2006, from the administrator of ICG chastising Matteo about speaking up against the sale, urging him to avoid expressing his thoughts and reminding him that only the administrators were allowed to speak for ICG,” the lawyer said.
Mereu, speaking in response to prosecutor Gaetano Ruta’s remarks made in January, claimed his accusations came from “unfounded deductions” and an “alternative reconstruction of the issue.”
Her colleague Paolo Dé Capitani said Ruta “provided no proof” that ICG was a fictitious entity, “taking it as a given.” Mereu remarked that it was “perfectly legitimate to set ICG in Luxembourg. The law says it’s legitimate also with the goal of pursuing a tax saving.”
In any case, she said, ICG was an existing vehicle that Valentino shareholders Umberto Marzotto and Andrea Donà Dalle Rose suggested using, she added. “Matteo enters at a later date. He had a passive role and there was no predetermination.”
Before the sale, Matteo Marzotto “felt protected” by the shareholders’ pact and ICG to contrast a takeover, for example, by former VFG chairman Antonio Favrin and shareholder Dario Segre through their vehicle Canova. The shareholders’ pact was inked precisely to avoid a sale, not for the purpose of tax evasion, said Mereu, adding that the Marzottos’ profits from the sale were channeled into Mediobanca’s Spafid, an Italian trust, which is “transparent” and is an Italian taxable entity.
Mereu underscored the “absence of contribution from either sibling” to the sale. Matteo Marzotto, for one, was in Rome negotiating the exit of founder Valentino Garavani and at the Cannes Film Festival during crucial days of the sale.
She also said there was “no proof beyond reasonable doubt” of any predetermined agreement between the subjects to avoid Italy’s tax rate. Once again, the lawyers quoted the sentence that acquitted Domenico Dolce and Stefano Gabbana of tax evasion.
At the end of last year, the defendants’ lawyers had requested the judge to acquit their clients, contending there was no case to answer. Ruta was seeking one year and four months in prison for the Marzottos and defendant Massimo Caputi.
The next hearing, with additional remarks from the defendants’ lawyers, is scheduled for Feb. 17 and could result in Judge Orsola De Cristofaro’s verdict.