ITALY: Former Parmalat execs arrested as scandal deepens
Several of Parmalat's former executives have been arrested on suspicion of serious fraud after the Italian food giant filed for bankruptcy protection amid a huge financial scandal.
Former chief executive Calisto Tanzi, along with two former finance directors and a senior auditor, are among eight people currently being held in connection with the collapse of the dairy giant, Reuters reported.
As an investigation continues into the location of hundreds of millions of euros thought to have been embezzled from Parmalat, a lawyer representing Tanzi denied the existence of any "treasure chest".
"There is no treasure, and this fact should be made clear," Michele Ributti was quoted by Reuters as saying. His client, Tanzi, resigned in mid-December from the position of chief executive of the firm he built up from a family delicatessen to a global dairy giant and Italy's eighth-largest company. Under questioning, Tanzi revealed that the hole in Parmalat's accounts could total around €8bn (US$10.1bn).
Meanwhile, Parmalat's current managers were preparing yesterday [Sunday] to request new loans from banks in order to pay the company's wages and suppliers, reported Reuters.
The investigation into the company's financial collapse is likely to focus on a complex network of shell companies, offshore units and loans believed to have been used to hide Parmalat's financial losses. An inquiry has also been launched into the group's operations on the US financial markets.
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