Suing over spilt milk
It’s been dubbed “Europe’s Enron” – the saga that has engulfed Italy’s milk-processing giant Parmalat and its senior executives, blue-chip European and American banks, accountancy firms, politicians and 130,000 hapless small shareholders following the discovery in 2003 of a $14bn black hole in its finances.
The revelation triggered an eight year marathon of court cases in Europe and America, the disgrace of the Tanzi family that controlled Parmalat, at least one death, the collapse into administration of one of Europe’s most successful football clubs, and grave misgivings about the quality of governance in Italy’s boardrooms. And it’s still going on.
Here’s a snapshot of the highlights.
- During the 80s and 90s, Parmalat is hailed as a jewel in Italian commerce as entrepreneur Calisto Tanzi converts his father’s ham retailer in the city of Parma into a global dairy and food giant largely on the basis of long-life milk.
- In 2003, bondholders learn that nearly €4bn of funds in a Bank of America account are non-existent. The bank says the transfer document is a forgery. Trading in Parmalat shares are frozen. Tanzi, various family members and several executives are arrested, including feared chief financial officer Fausto Tonna, who tells journalists “I wish you and your families a slow and painful death” as he enters court. At the firm’s offices, investigators find smashed computers and thousands of shredded documents.
- In 2004, Parmalat’s debts are fixed at €14.3bn, eight times what the firm had admitted. After initial denials, Luca Sala, Bank of America’s former chief of corporate finances in Italy, admits to participating in a kickback scheme. Furious US creditors file a $10bn class action suit against Parmalat’s former auditors and bankers while Parmalat’s administrators under replacement chief executive Enrico Bondi separately sue Bank of America, Citigroup, Deloitte & Touche and Grant Thornton for $10bn each. The US SEC calls the affair a “brazen corporate financial fraud.”
- In 2005, Bondi relists a reconstructed Parmalat on the Milan exchange while various trials are going on in Milan.
- In 2008, Fausto Tonna is given a two and a half year jail sentence as the mastermind of a complex web of offshore subsidiaries to disguise the company’s parlous position. Five banks – Bank of America, Citigroup, Morgan Stanley, Deutsche Bank and UBS – stand trial in Milan on charges of market-rigging.
- In December 2010, Calisto Tanzi, now 72, is given an 18-year sentence and launches an appeal. Meanwhile the new-look Parmalat has recouped more than €2bn in bank settlements.
- In April 2011 after a three year trial, a Milan court acquits four banks – Morgan Stanley, Bank of America, Deutsche Bank and Citigroup – of market-rigging. Prosecutors had demanded that €120m of the banks’ profits be impounded. Describing it as “the death of consumer rights,” a consumer watchdog promises to join shareholders in another case to challenge the verdict. Meanwhile French firm Lactalis launches a takeover bid for Parmalat, which is blocked by the Italian government.
Pingback: My Homepage
Pingback: site
Pingback: levelingguidewow.org
Pingback: poceni letalske karte
Pingback:
Pingback: http://majorinsurancecompanies.net
Pingback:
Pingback: Industrial death in Italy « Revolting Europe
Pingback: black lamp shade
Pingback: googlezerlunited