Parmalat scandal hearing scheduled for March

By Anthony Fletcher

- Last updated on GMT

Related tags: Parmalat, Bank of america

A court hearing on 1 March will decide whether 13 bank executives
and four global banks should be sent to trial over the collapse of
Parmalat.

Prosecutors argued last July that the financiers should stand trial for allegedly helping the disgraced Italian dairy group's former management mislead investors.

Under Italian law, companies can stand trial, and can be forced to close if found guilty.

The foreign banks are Citigroup and Morgan Stanley, Germany's Deutsche Bank and Swiss bank UBS. The banks have all denied wrongdoing in Parmalat's collapse.

Parmalat went into administration in December 2003 following the revelation that a key account with Bank of America did not exist. Holes in the firms accounts hid the fact that the company was a whopping €14 billion in debt.

Since then, Milan magistrates have been investigating suspected financial crimes associated with the scandal. Calisto Tanzi, the founder of the scandal-hit dairy, faces charges of false accounting and share price manipulation.

He is being tried in Milan alongside 15 former executives of the company, which was built up by Tanzi from a small family grocer in the northern Italian city of Parma to a company with 37,000 staff. He stands accused of manipulating the stock market, publishing false balance sheets and obstructing regulation by the stock market watchdog Consob.

The future of Parmalat itself however has looked up since the government-appointed administrator, Enrico Bondi, took charge. He was appointed chief executive in November , a move that represented a ringing endorsement from shareholders of his plans.

The vast majority of shareholders clearly still have faith in his strategy of winning billions of euros in lawsuits against banks. Bondi has sought financial compensation from some of the banks alleged to have been involved in the collapse.

Bondi has already claimed €8.07 billion in damages in lawsuits filed against the group's auditors and banks. Parmalat has also sued banks JPMorgan Chase and Unicredito Italiano for €4.4 billion for their roles in the sale of Parmalat bonds issued from 1997 through 2001.

Related topics: Manufacturers

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