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Supreme court upholds convictions in Parmalat case

Charges of criminal conspiracy confirmed against businessmen

07 March, 18:37
Supreme court upholds convictions in Parmalat case (ANSA) - Rome, March 7 - Italy's top court on Friday confirmed 15 convictions in connection with the collapse in 2003 of food group Parmalat.

At the same time, the court trimmed five months off the 18-year sentence of founder and former chief executive Calisto Tanzi, who was originally convicted for the fraudulent bankruptcy that led to Parmalat's collapse. Other executives saw their sentences for criminal conspiracy upheld in the enormous fraud that saw 150,000 investors damaged and debts of about 14.5 billion euros revealed.

Fausto Tonna, Calisto Tanzi's former right-hand man, saw his sentence upheld at just under 10 years; Giovanni Tanzi, Calisto's brother, had his sentence of 10 years and six months upheld; and former manager Lucian Silingardi had his six-year sentence confirmed.

Numerous other former executives and board members also saw their jail terms, ranging from more than seven years to one year, upheld.

Calisto Tanzi had also been convicted in Milan of market rigging and feeding false information to stock market regulator Consob in connection with the collapse of his food multinational.

Parmalat was declared bankrupt in December 2003 after it emerged that four billion euros it supposedly held in an offshore Bank of America account did not, in fact, exist.

The case then snowballed, eventually leading to Parmalat's collapse amid debts of some 14.5 billion euros and a fraud scandal which rocked the Italian financial world.

Investigators found that from 1990 until 2002, Parmalat lost money every year except one but nonetheless reported uninterrupted profits and routinely forged documents in order to deceive banks and regulators.

The US Securities and Exchange Commission called the case "one of the largest and most brazen corporate financial frauds in history".

Parmalat's bankruptcy - dubbed 'Europe's Enron' after an enormous energy fraud in the United States at the same time - left more than 150,000 investors with virtually worthless bonds.

Parmalat was later put back on its feet by corporate turnaround expert Enrico Bondi who, first as government-appointed administrator and later as official CEO, shed the group's non-core activities, cut foreign activities and reduced staff.