LAWFUEL – The Legal Newswire – The founder of collapsed dairy giant Parmalat and two powerful Italian bankers have been charged with playing key roles in the company’s collapse, an Italian judge has ruled.
Parmalat’s collaspe resulted in the largest corporate bankruptcy ever in Europe.
The judge, Domenico Truppa, indicted Cesare Geronzi, the chairman of the powerful investment bank Mediobanca, with fraudulent bankruptcy. Matteo Arpe, the former chief executive of the Rome-based bank Capitalia, who is considered one of the rising stars of the Italian financial world, was also charged with failing to act to stop the fraud that led to the spectacular implosion of Parmalat in 2003.
Judge Truppa, who made the announcement after a hearing in Parma, where Parmalat is based, also charged more than 50 other people, including Calisto Tanzi, the company’s founder and former chairman, and Fausto Tonna, the former chief financial officer.
Mr. Tanzi and 15 other defendants are also on trial in Milan, where they face lesser charges including market manipulation and making false statements to regulators. A judge in Milan has also ordered Citigroup, Deutsche Bank, Morgan Stanley and UBS to stand trial on charges of market manipulation.
The four banks have denied the charges.
Mr. Tanzi has admitted that Parmalat began falsifying its accounts in the 1980s, but the fragile house of cards did not collapse until December 2003, when it emerged that a bank account the company said held 3.9 billion euros ($5.39 billion) did not exist. Mr. Tanzi and more than a dozen other former Parmalat employees and advisers were jailed in the weeks after the collapse, but they were all released within a few months and no one connected with the case is currently in jail.