Parmalat founder indicted by Milan judge; trial starts Sept. 28

Parmalat Finanziaria SpA founder Calisto Tanzi and 16 others were indicted by a Milan judge on charges including market manipulation for their role in causing Italy's biggest bankruptcy.

Tanzi, 66, faces a maximum of 15 years if convicted in Milan on all the charges. Judge Cesare Tacconi handed down the indictment one month after Milan prosecutors rejected a plea bargain agreement with Tanzi. The trial will start Sept. 28.

"We are knowledgeable about Tanzi's responsibility but believe that there is even bigger responsibility on part of the banks," GiamPiero Biancolella, Tanzi's lawyer, said in an interview.

In addition to Tanzi, 11 other people from Parmalat, three from Bank of America Corp., and two from Deloitte & Touche LLP were indicted. Parmalat's collapse prompted EU rulemakers to increase scrutiny of corporate governance and tighten auditing regulations.

"It's very important for investors to know the trial will start very soon," Marco De Luca, a Parmalat lawyer, said in an interview.

Parmalat, Italy's biggest foodmaker, filed for bankruptcy in December 2003 and later revealed that it had about 14 billion euros (US$17 billion) of debt, about eight times more than reported by the company's former management.

Among those indicted on the request of Francesco Greco, the prosecutor who led the Milan investigation, were: eight members of the Parmalat board; former general manager of Parmalat Finanziaria, Andrea Petrucci; Luca Sala, the former head of Bank of America's Italian corporate finance division; and Deloitte & Touche partners Adolfo Mamoli and Giuseppe Rovelli, all for the same charges.

Tanzi was jailed Dec. 27, 2003, and then granted house arrest in April last year. He was released from house arrest in September. Tacconi rejected efforts by Tanzi's defense attorney's to transfer the trial to Parma, where prosecutors closed their investigation into more serious charges of fraudulent bankruptcy last month.