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Leading Albanian investment fund looks to Italian firm for help

February 19, 1997

ROME (AP) _ When an Albanian conglomerate caught up in the country’s investment-fund crisis sought help, it looked across the Adriatic Sea to a small accounting firm near Naples.

The move by VEFA Holding was a reminder of the interest _ both economic and political _ that Italy, Albania’s main trading partner, has in the turmoil that has roiled the poorest nation in Europe.

Italy’s police and coast guard turn back scores of would-be Albanian immigrants practically every week.

The government fears another influx like the tens of thousands of Albanians _ inspired by images of prosperity on Italian television _ who clung to ferries or homemade rafts in 1991 trying to make it ashore. Most were sent home.

The government also is concerned about drug-trafficking, cigarette-smuggling and prostitution rings that allegedly involve both Italian and Albanian organized crime.

Italian officials have cited possible mob connections to the latest Albanian crisis, in which hundreds of thousands of Albanians lost their savings to pyramid schemes.

The losses have led to rioting around Albania as the funds stopped paying interest and collapsed.

VEFA operates one of the biggest investment funds, which had continued to operate despite assertions by economists that it is at least partly based on a pyramid system like other failed companies.

In recent weeks, VEFA sharply reduced interest payments to 2.5 percent from 10 percent, then announced today it would no longer pay out interest at all. It outlined a schedule to repay investors their capital, up to $20,000.

Representatives of Cecere and Caputo, an accounting firm in the town of Aversa near Naples, headed today to the Albanian capital of Tirana to examine VEFA’s books.

A consultant for the firm, Gianni Capizzi, said he was leading a seven-member team assigned to restructure VEFA, which is controlled by Vehbi Alimucaj, a former army sergeant with no economic training.

The first step will be ``to give a hand to Mr. Alimucaj to understand what he even has,″ Capizzi said by telephone. He said he had no reason to believe that VEFA operated in an illegal way.

Cecere and Caputo was the subject of a story in Tuesday’s Il Messaggero of Rome, which reported the brother of deceased founder Gennaro Cecere has been arrested on Mafia association charges.

Capizzi said the brother had no connection with the firm, calling the case ``absolutely extraneous.″

Nicola Caputo, the other principal in the Italian firm, has met Alimucaj several times while on business in Albania, Capizzi said.

The stakes are high for VEFA.

Because of its size and government links, the 5-year-old VEFA has drawn extra scrutiny and has been held up as a model of post-communist free enterprise in Albania. If it fails, that concept could be heavily discredited in the minds of many Albanians.

In Albania, it has extensive holdings: factories, supermarkets, a mine, tourist centers and a helicopter fleet. VEFA also operates in Italy, running a ferry service from Durres, Albania.

The trade goes both ways. About 500 to 600 Italian companies _ mainly textile and shoe firms _ invest in Albania, for a total of $110 million to $120 million, according to Italy’s Foreign Commerce Institute.