Stricken Italian dairy giant was today [Tuesday] reported to be on the verge of declaring bankruptcy as investigators tried to track down some €4bn (US$4.9bn) in missing funds, garnering it the tag “Europe’s Enron”.
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Italian prosecutors yesterday [Monday] placed around 20 managers, board members and auditors of Parmalat under investigation for serious fraud, false reporting and stock manipulation, following confiscation and examination of papers from the Milan offices of auditing firms Grant Thornton and Deloitte & Touche at the weekend.
Parmalat is Italy’s largest food company. As reported last week, investigators have discovered that its Cayman island subsidiary Bonlat was a shell company to which balance sheet losses of other subsidiaries could be transferred. A letter confirming that Bonlat had a €3.95bn account with Bank of America, which the bank declared false last week, appears to have been forged by the company using a scanner to reproduce the bank’s logo, reported Italian paper Il Sole 24 Ore.
The company, founded by Callisto Tanzi in 1961, employs 36,400 workers in 30 countries, and there are fears over how its collapse would affect Italy’s dairy industry, particularly in the impoverished southern part of the country. Tanzi and his son are among those under investigation. The government is reported to be considering a plan to help Parmalat and its suppliers.
Trading in Parmalat shares is currently suspended.
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