The collapse of Parmalat is turning into one of the most bizarre as well as one of the biggest fraudulent bankruptcies in Europe for decades. \nThe repercussions are putting bankers, auditors and regulators under the spotlight in many parts of the world as investigators unravel clues to how many billions of euros may be missing, for how long and why. \nParmalat, they seem to have discovered, was held together by a Milky Way of companies and accounts to service food activities from South and North America to Europe and Australia -- and allegedly to dress up scanty finances and siphon funds into other pockets. \nAmong countries touched by the investigation are: Austria, Brazil, Cayman Islands, Germany, Luxembourg, Italy, the Netherlands, Switzerland, the US, and Venezuela. \nThe affair has also besmirched some top names in finance which had dealings with the group. Among banks in the spotlight are Citigroup, Bank of America, JP Morgan, Deutsche Bank, ABN Amro, UBS, Banco Santander Central Hispano, and in Italy, Banca Intesa and Capitalia. \nIt has also embarrassed international auditing groups Grant Thornton and Deloitte and Touche which Parmalat, under administration by rescue specialist Enrico Bondi, dismissed recently. \nBut it is in Europe that the continuous stream of revelations is hitting hardest. \nThe EU Commission, as well as the Italian government, is reviewing ways to strengthen watchdogs. \nThe commission has said it must "begin to analyse the implications for EU financial services policies" and that in February it would tighten proposals on auditing to "greatly strengthen the oversight of audit firms." \nThe Italian government has criticized the Consob stock regulator and Bank of Italy for their monitoring of Parmalat and is working on new financial regulations "with urgency to give a response to the international markets which want to be told that Italy is a safe country". \nAnd the Organization for Economic Cooperation and Development has redrafted guidelines, originally intended for emerging countries, in response to frauds of the Enron and WorldCom type but made specific reference to Parmalat when it published them this week. \nOECD director general Donald Johnston declared: "It's clear there are a number of areas where changes are needed, and this is most striking in the Parmalat affair ... We never contemplated a need to discuss this in the United States and Europe." \nThe astonishing story of how the rapid rise of the Italian food empire built on milk came to end in tears for many, has been unfolding for six weeks. Several enquiries are under way and nine people have been detained for suspected fraud. \nIn all, 26 people have been told they are being investigated with a view to charges being laid, a procedure which gives them access to evidence. \nNo formal charges have been laid and much of the picture has emerged through press reports and allegations by investigators. But the company is insolvent and 36,000 employees are waiting to hear if the Italian state will orchestrate a rescue or if predators will pick up the pieces. \nThe plot so far, unproved but widely told, is worthy of the most imaginative scriptwriter: Calisto Tanzi, a young man in Parma, the home of Italian cured ham and Parmesan cheese, takes over his family's small meat business in the 1960s, diversifies into milk and builds a global empire. \nParmalat buys a second-rate football club -- Parma -- and turns it into a European winner. Tanzi puts his son in charge. "Don Calisto" is said to fund the renovation of churches and to ferry politicians and prelates in company aircraft. \nBut behind this facade, in the last decade Tanzi and a few key managers allegedly invent accounts and assets. \nAnd they create documents to clothe the fiction in order to cover poor performance and to divert funds, into a failing local travel company, Parmatour, controlled by his daughter, for example. \nAnd with this world of make-believe they fool banks and auditors, -- until bond payments fall due and financial entities with such names as Bonlat, Epicurum or Buconero -- black hole in English -- are revealed as the top of a bottomless pit. \nThe company's telephone manager turns out to have been the titular head of about 30 companies. Investigators say that each time they open a set of books they find more nasty surprises. \nMany shocking but colorful European corporate frauds of the last 25 years come to mind: the Maxwell pension fund fraud and the collapse of Barings bank in Britain, for example. \nOne of the strangest was the collapse of the Italian Banco Ambrosiano in the early 1980s with links to an alleged right-wing political plot and separately to the Vatican. \nThe mafia is suspected of having murdered one key figure, and a close associate banker died in prison after drinking poisoned coffee. \nHowever, the Parmalat affair, "one of the largest and most brazen financial frauds in history" in the words of US regulators, stands out because it is bizarre, reaches into many countries and seems certain to change regulatory thinking.
PHOTO: AP
MARKET BOOST: Elon Musk said Tesla would resume bitcoin transactions once there is ‘reasonable’ clean energy usage by miners and denied selling a big part of his holdings Bitcoin yesterday hit a two-week peak just shy of US$40,000, after another weekend reacting to tweets from Tesla Inc chief executive Elon Musk, who fended off criticism over his market influence and said Tesla sold bitcoin, but might resume transactions using it. Bitcoin has gyrated to Musk’s views for months since Tesla announced a US$1.5 billion bitcoin purchase in February and said it would take the cryptocurrency in payment. He later said the electric vehicle maker would not accept bitcoin due to concerns over how mining the currency requires high energy use and contributes to climate change. “When there’s confirmation of reasonable
China Steel Corp (中鋼), the nation’s biggest steelmaker, yesterday said that it would not be raising prices for some products next month, ending 12 consecutive months of increases. “There is a discrepancy between China Steel’s prices and international prices, but in consideration of price stability, we have decided not to adjust upward monthly-priced products,” the company said in a statement. That means the price of hot-rolled steel plates, hot-rolled steel coils, cold-rolled steel coils and other monthly-priced items would not change next month. However, the cost of other items priced seasonally would be going up, the company said, adding that prices of products
Synopsys Inc, a US-based electronic design automation solutions provider, yesterday said that it has signed up more than 20 of its clients for the latest device made using the most recent advanced process developed by Taiwan Semiconductor Manufacturing Co (TSMC, 台積電). Synopsys’ DesignWare IP, which is used by designers of integrated circuits, has been used by more than 20 clients in a wide range of industries, including automotive electronics, artificial intelligence, high-performance computing devices and servers, the company said in a statement. The DesignWare IP solution was made using TSMC’s advanced 5 nanometer process, its latest technology, which the semiconductor giant launched
MOVING ON UP: Taiwan improved in all four areas measured by the IMD, making its biggest leap, from 17th to sixth place, in economic performance Taiwan moved up three spots from last year to place eighth, its best performance since 2013, in the latest annual world competitiveness rankings, released yesterday by the International Institute for Management Development (IMD). Innovation, digitalization, welfare benefits and social cohesion are critical to economic performance, with Switzerland, Sweden, Denmark, the Netherlands and Singapore making up the top five on the list this year, the Switzerland-based institute said, after grading 64 countries and regions based on economic performance, infrastructure, and government and business efficiency. “Leading performers are characterized by varying degrees of investment in innovation, diversified economic activities and supportive public policy,” IMD
RSS