Pathe’s Earnings Improve; CEO’s Problems Continue

Pathe Communications, formerly the Cannon Group, on Tuesday reported improved earnings in its annual report for 1988 but stirred new confusion about the legal status of its chief executive, Giancarlo Parretti, who faces a criminal charge in Italy.

For the year ended last Dec. 31, the Beverly Hills-based entertainment company reported net income of $21.4 million, in contrast with a net loss of $98.3 million for the preceding year.

Total revenue for 1988 declined 12.3% to $371.1 million, reflecting a sharp reduction in the number of films released by the company. Only 18 movies were released in 1988, compared to 44 in 1987.

According to the company’s 10-K annual report, Parretti is subject to a criminal proceeding in Naples--seemingly in contrast with statements made by Parretti and Pathe attorney Fabio Serena one month ago. In a March interview, both men told The Times that Parretti had been cleared of charges and said the 10-K would omit any mention of an alleged misstatement of the balance sheets of Siracusa Calcio, a soccer team, and Il Diario, a newspaper.

Parretti, reached by telephone, referred queries to Serena, who did not return a reporter’s call.

Parretti was scheduled to go on trial today in Naples on fraud charges related to the bankruptcy of his Diario newspaper in 1982, according to a recent article in Daily Variety, but the trade publication said Parretti’s attorneys might seek a postponement.

According to Pathe’s filing with the SEC, Parretti has been charged with “fraudulent documentary bankruptcy” in connection with a bankrupt Italian firm’s failure to file its annual balance sheet in 1983. The Italian company is not identified, but the company said Parretti’s Italian counsel has stated an opinion that Parretti will be acquitted.