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Mon, Dec 29, 2003 - Page 12 News List

From dropout, to mogul, to wanted man

REUTERS , MILAN

Calisto Tanzi, detained on Saturday in the Parmalat fraud scandal, dropped out of university to build a global food group that was once a jewel of Italian industry but now is insolvent.

Tanzi, founder and former head of Parmalat, was detained by police on Saturday on the order of prosecutors investigating for fraud at the group he created 42 years ago.

In less than two weeks, he went from being chairman and CEO of Italy's eighth biggest industrial group to leading suspect in the probe, seized by police on a Milan street and held for questioning in a Milan prison.

Starting in 1961 with a pasteurization plant near Parma, Italy's gastronomic capital, Tanzi built Parmalat virtually single-handedly into a global group, capitalizing on technology for making long-life milk and then snapping up rivals.

For years Parmalat was one of Italy's biggest success stories, a family-owned company made big in the tradition of the Agnellis at Fiat and the Benettons.

Parmalat, whose cartons of long-life milk, juices and biscuits line shelves from Brazil to Australia, has some 35,000 employees and its turnover totalled 7.6 million euros last year.

But media-shy Tanzi, 65, and his close allies also built a global web of financial holdings whose size and complexity only recently emerged as the crisis started unfolding in November.

Tanzi resigned as chairman and CEO of Parmalat on Dec. 15. One week later prose-cutors named him in their fraud probe.

Tanzi quit university at 21 to join the family business -- a delicatessen near Parma's train station -- when his father fell ill.

He soon started a milk business, and after a milk sales monopoly was broken in Italy in 1973, Parmalat quickly became a national industry leader, diversifying and pushing abroad. The company was listed on the Milan bourse in 1990.

As his empire grew, Tanzi cultivated ties with bankers, politicians and the church to the point where his helicopter was nicknamed "the helicopter of God" for its frequent ferrying of politicians and priests.

"Christian and moral values are important, not money," Tanzi said once.

Grey-haired Tanzi is generally adored in Parma where he sponsors many cultural events.

In the tradition of Italian company bosses from Mediaset founder Silvio Berlusconi -- now prime minister -- to failed canned goods company Cirio's ex-chairman Sergio Cragnotti, Tanzi also made his mark on the sports world, buying the Parma football club in the group's headquarter city.

His son Stefano, board member at Parmalat, is president of the Serie A club.

But Tanzi was reported to have raised his salary by 600,000 euros to 1.6 million euros in April, two months after the group withdrew a bond issue in February amid growing concerns about its financial management.

Although he has stepped down as chief, his family's La Coloniale holding company still owns 51 percent of Parmalat.

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