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Prosecutors seek trials for 29 people in Parmalat case
MILAN (AP)--Prosecutors in the Parmalat fraud case appeared in court Oct. 5 to convince a judge to order trials for 29 people, ranging from the dairy giant's founder to former company financial officers and accountants.
The closed-door preliminary hearing at Milan's courthouse was the first of at least two hearings scheduled to decide on the prosecutors' requests for indictments, and Judge Cesare Tacconi was not immediately expected to issue a ruling.
Parmalat's founder and former chief executive Calisto Tanzi was not in court.
Prosecutors earlier this year formally requested the indictment of Tanzi as well as several other former company employees, including top financial officers and accountants.
The multinational company's acknowledgment in December that it didn't have the EUR3.95 billion it had claimed was in a Bank of America Corp. account stunned the business world. It was the first shocking indication of the extent of the scandal, which the U.S. Securities and Exchange Commission has called "one of the most brazen corporate frauds in history."
Shortly after the first revelations, Parmalat, once held up as a model of enterprising, family-run Italian companies, went into bankruptcy protection. An audit during the early days of the probe put the company's debt at EUR14 billion, eight times higher than the company claimed in its accounts.
Under Italian law, institutions can be indicted as well as people, and the prosecutors' request for indictment cited Bank of America and auditors Deloitte & Touche SpA and Grant Thornton's former Italian branch.
Alleged crimes listed on the indictment included market rigging, providing false information to auditors and blocking the work of stock market regulator Consob.
In March, a different judge turned down a request from the prosecutors for a fast-track trial, citing the complexity of the evidence. In the full-blown procedure, a judge assesses the evidence that prosecutors present before ruling on indictments.
The Milan prosecutors have focused on the role of financial institutions, banks and other financial institutions in the scandal.
In a separate probe, prosecutors in Parma have been investigating Tanzi and other former top executives for alleged fraudulent bankruptcy and other charges. The Parma probe is still being conducted.
Tanzi was released from house arrest in early October after spending months under arrest at home, in jail and at hospitals, where he was treated for a chronic heart problem.
Thousands of investors who lost money in Parmalat's crash have been closely watching the judicial procedures in hopes of receiving compensation. Many are modest Italian savers.
Enrico Bondi, the government-appointed turnaround expert trying to relaunch Parmalat, has filed suits for billions of euros against the banks Citigroup, UBS, Deutsche Bank, Credit Suisse First Boston, as well as Parmalat's former auditors.
He has said investors could receive proceeds from these suits, and that those who lost savings would be given shares in a newly listed company.
Bondi has said he believes the financial institutions either abetted the company by disguising its true financial state or received money from Parmalat at the expense of other creditors when there were clear indications its finances were worse than the company had stated.
International financial institutions have insisted they were fooled by Parmalat's fraudulent bookkeeping.
Bondi is hoping to save the company by focusing on core products such as milk, yogurt and juice and scaling down the company's international presence from 30 countries to around 10 countries.
Date: 10/20/04
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