A court in Milan has found Parmalat founder Calisto Tanzi guilty of falsifying accounts, misleading investors and manipulating the market while he was CEO of the Italian dairy group, which collapsed under debts of EUR14bn (US$20bn) in 2003.

Tanzi, 70, was yesterday (18 December) delivered a ten-year sentence. However, due his age it is unlikely that he will spend any time in jail, Italian reports have suggested.

The court cleared seven other defendants, including former Parmalat and Bank of America executives.

"The ruling establishes beyond doubt that former bank employees did not engage in market manipulation," Bank of America said in a statement. "After over four years of trial, it was clearly proven that the Parmalat fraud was perpetrated solely by the Parmalat insiders with the active assistance of its auditors."

The ruling is a blow to Parmalat, which has actively sought damages from a number of banks and auditors that it accuses of aiding former management in defrauding the company.

To date, the company has recovered about EUR1.5bn in out-of-court-settlements. However, in October, Parmalat lost a case seeking $2.2bn from Citigroup when a New Jersey court ordered the dairy giant to pay $364m in civil damages to the bank.

That verdict has hit Parmalat's hopes of securing a favourable judgment in a case it has bought seeking damages from Bank of America.

"As the evidence demonstrated, no one at Bank of America knew or could have discovered the true financial condition of Parmalat. Parmalat's true financial condition was not discovered even during the course of intensive investigations by Consob and other public authorities," Bank of America said.

Parmalat declined to comment when contacted by just-food.