Parmalat sues banks in bid to recoup billions
€4.4 billion for their roles in the sale of Parmalat bonds issued
from 1997 through 2001.
The disgraced Italian dairy giant, which revealed a €14.3 billion hole in its accounts back in December 2003, hopes to recover billions by suing financial institutions that administrator Enrico Bondi claims helped the former Parmalat management deceive investors.
Unicredito have called the lawsuit groundless and said that it would defend its reputation, while JPMorgan has also denied any wrongdoing. Indeed, the financial sector has repeatedly stated that it was fooled by the Parmalat fraud.
The move comes after Italian police arrested former Bank of America executive Luca Sala earlier this month. Sala, who played a key role in the US private placement of bonds in the collapsed Italian dairy group, was arrested following accusations of involvement with Parmalat's fraudulent bankruptcy, though he has previously denied any wrongdoing.
Bondi's aim is to recover €7 billion from companies involved in dealings with Parmalat's previous management on the grounds that these firms were fully aware of the company's unhealthy finances. He has already had significant success, claiming €8.07 billion in damages in lawsuits filed against the group's auditors and banks.
Morgan Stanley for example recently agreed to pay Parmalat €155m in an out-of-court settlement. "We are pleased that an institution of Morgan Stanley's stature has decided to contribute to the new Parmalat," said Bondi.
Such actions have slowly helped to turn around the company's fortunes. It was able to re-float on the Italian stock exchange earlier this year, despite the fact that Italian stock market regulator Consob raised questions over its future restructuring plans.