In what could be one of the largest trials in Italian legal history, the judge involved in the first hearing relating to the collapse of Parmalat has granted a request for an expedited trial over securities law violations

In the first hearing related to Parmalat’s collapse, an Italian judge granted a request from two of the fallen dairy titan’s former auditors for an expedited trial for alleged securities-law violations.

Judge Cesare Tacconi is now expected to hold new hearings until at least December to decide whether to accept Milan prosecutors’ requests to indict 27 other individuals – including Parmalat founder and former chairman Calisto Tanzi – and three firms that worked or did business for Parmalat, the Italian industrial icon that is alleged to have pulled off modern Europe’s largest-ever corporate fraud.

Parmalat filed for bankruptcy protection in December 2003 amid allegations that a decade-long fraud had burdened the dairy giant with €14.2billion ($24 billion) in debt.

Prosecutors allege that Parmalat’s former managers funded much of the fraud by borrowing billions of dollars from investors around the world, most of whom are now facing huge losses.

Enrico Bondi, the company’s new administrator, has filed suit in Italy against Switzerland’s UBS, Germany’s Deutsche Bank and the Credit Suisse First Boston arm of Credit Suisse Group in an attempt to undo deals the banks undertook for Parmalat during the two years before its bankruptcy filing.

In the US, Mr Bondi has sued Citigroup in New Jersey state court, seeking up to $US10billion ($14 billion) in damages.

So far, Milan prosecutors, led by Francesco Greco, have sought to indict the Italian unit of Bank of America, along with Parmalat’s former auditors, Deloitte & Touche and Grant Thornton, which was expelled from Grant Thornton’s global network in January and was renamed Italaudit.

Prosecutors have also sought to indict 29 individuals connected to Parmalat on alleged securities-law violations. In Italy, these crimes carry up to five years in prison.

Judge Tacconi yesterday agreed to let former Grant Thornton auditors Lorenzo Penca and Maurizio Bianchi be tried under a fast-track procedure that skips lengthy preliminary proceedings and is due to start on January 27, 2005. They are accused of market-rigging and false accounting.

Prosecutors this northern spring had sought to indict all the individuals and the three firms on so-called fast-track legal procedures but their request was denied, mainly on technical grounds.

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