Parmalat founder Calisto Tanzi was sentenced on Thursday to 10 years in prison over a 14-billion euro (US$20 billion) fraud scandal in 2003 that caused Europe’s largest corporate bankruptcy to date.
The 70-year-old, who turned a modest pasteurized milk company into a leading food manufacturer and symbol of Italy’s post-World War II prosperity, is the first executive to be sent to prison for his part in the firm’s collapse.
The sentence — less than the 13 years demanded on Monday by prosecutors — was handed down by a tribunal in Milan, the ANSA news agency reported.
Tanzi, also the former chief executive of the Italian food giant, stood accused of manipulating the company’s share price, assisting in false accounting and hindering audits.
Dubbed “Europe’s Enron,” the Parmalat affair erupted in late 2003 when more than 14 billion euros went missing from the group’s accounts.
The demise of the food conglomerate, which employed 36,000 in 30 countries, wiped out the savings of around 135,000 people in Italy.
The Parmalat collapse spawned a series of trials in which several defendants, including Tanzi’s adult children Francesca and Stefano, have already negotiated lighter prison terms.
The court in Milan acquitted on Thursday seven other suspects in the case, three of whom worked for Bank of America, and fixed prison terms of between two months and five months and 10 days for a further 10 accused.
Italaudit, Parmalat’s former auditor, an ex-Grant Thornton partner, was ordered to pay a fine of 240,000 euros and had a further 455,000 euros confiscated.
Bank of America welcomed the ruling clearing its employees of any wrongdoing in the case and proving “that the Parmalat fraud was perpetrated solely by the Parmalat insiders with the active assistance of its auditors,” it said.
“As the evidence demonstrated, no one at Bank of America knew or could have discovered the true financial condition of Parmalat,” the bank said in a statement.
The trial, which began in September 2005, was the first opened into the collapse of the food giant.
One of the three prosecutors, Francesco Greco, likened the case to “an ugly mafia scandal.”
A second trial in Milan opened in January this year with three foreign banks — Citigroup, Morgan Stanley and Germany’s Deutsche Bank — and several employees accused of price manipulation and disseminating false financial information.
The third and largest trial linked to the company’s collapse in terms of number of suspects and sentences only started last March in the northern city of Parma, site of the company’s headquarters.
The trial involves 55 defendants, including Tanzi, his brother Giovanni Tanzi, chief financial officer Fausto Tonna and several bankers, on charges of bankruptcy fraud and criminal association.
Both the prosecution and Tanzi’s lawyers accused the banks of having sold Parmalat shares so that they could safeguard their own investments in the group, fully aware of its insolvency.
Parmalat had demanded 7.1 billion euros in damages and interest from Credit Suisse and 2 billion dollars from UBS, but in June this year Swiss banks agreed to pay 357.5 million euros in settlements.
In October a jury in the US state of New Jersey dismissed a claim by Parmalat that Citigroup helped executives at the food group drive it to bankruptcy in 2003 through fraud and theft.
The US jury also ordered Parmalat to pay US$364.2 million to Citigroup, which had demanded damages and interest.
The sum was to be paid in shares, which gave the US bank a 1.13 percent stake in Parmalat.
The Parmalat affair was a landmark case owing to the scale of the fraud and because it shook the world of Italian finance, highlighted failings in accounting regulations and besmirched prestigious names in international banking and accounting.
The Burmese junta has said that detained former leader Aung San Suu Kyi is “in good health,” a day after her son said he has received little information about the 80-year-old’s condition and fears she could die without him knowing. In an interview in Tokyo earlier this week, Kim Aris said he had not heard from his mother in years and believes she is being held incommunicado in the capital, Naypyidaw. Aung San Suu Kyi, a Nobel Peace Prize laureate, was detained after a 2021 military coup that ousted her elected civilian government and sparked a civil war. She is serving a
China yesterday held a low-key memorial ceremony for the 1937 Nanjing Massacre, with Chinese President Xi Jinping (習近平) not attending, despite a diplomatic crisis between Beijing and Tokyo over Taiwan. Beijing has raged at Tokyo since Japanese Prime Minister Sanae Takaichi last month said that a hypothetical Chinese attack on Taiwan could trigger a military response from Japan. China and Japan have long sparred over their painful history. China consistently reminds its people of the 1937 Nanjing Massacre, in which it says Japanese troops killed 300,000 people in what was then its capital. A post-World War II Allied tribunal put the death toll
‘NO AMNESTY’: Tens of thousands of people joined the rally against a bill that would slash the former president’s prison term; President Lula has said he would veto the bill Tens of thousands of Brazilians on Sunday demonstrated against a bill that advanced in Congress this week that would reduce the time former president Jair Bolsonaro spends behind bars following his sentence of more than 27 years for attempting a coup. Protests took place in the capital, Brasilia, and in other major cities across the nation, including Sao Paulo, Florianopolis, Salvador and Recife. On Copacabana’s boardwalk in Rio de Janeiro, crowds composed of left-wing voters chanted “No amnesty” and “Out with Hugo Motta,” a reference to the speaker of the lower house, which approved the bill on Wednesday last week. It is
FALLEN: The nine soldiers who were killed while carrying out combat and engineering tasks in Russia were given the title of Hero of the Democratic People’s Republic of Korea North Korean leader Kim Jong-un attended a welcoming ceremony for an army engineering unit that had returned home after carrying out duties in Russia, North Korean state media KCNA reported on Saturday. In a speech carried by KCNA, Kim praised officers and soldiers of the 528th Regiment of Engineers of the Korean People’s Army (KPA) for “heroic” conduct and “mass heroism” in fulfilling orders issued by the ruling Workers’ Party of Korea during a 120-day overseas deployment. Video footage released by North Korea showed uniformed soldiers disembarking from an aircraft, Kim hugging a soldier seated in a wheelchair, and soldiers and officials
RSS