Posted on 01/06/2004 5:53:36 AM PST by tom paine 2
Investigative magistrates are threatening to stage a direct confrontation between two of the alleged masterminds behind the Parmalat scandal this week in an attempt to trace €10bn ($12.6bn) estimated to have disappeared from the bankrupt dairy group.
Investigators in Parma on Monday subjected Fausto Tonna, Parmalat's veteran chief financial officer, to a day-long grilling. They are expected on Tuesday to turn to Gian Paolo Zini, Parmalat's chief legal counsel who helped set up many of the foreign and offshore companies now under scrutiny.
If there are discrepancies between their testimonies, investigative magistrates are expected to organise a direct confrontation between the men. Both were arrested last week.
Mr Tonna appeared in no mood to co-operate when he arrived for interrogation on Monday. He turned to journalists to say: "I wish you and your families a slow and painful death."
Later, according to court sources, he said he was only executing orders given him by Calisto Tanzi, Parmalat's founder and chairman who is also under arrest. Mr Zini this weekend also denied wrongdoing.
Investigators in Milan, meanwhile, are expected to dig further into the roles played by Bank of America and Citigroup in Parmalat's offshore companies.
Citigroup took a minority stake when Parmalat set up an offshore company used to make inter- company loans that were kept off Parmalat's balance sheet. Citigroup has denied wrongdoing.
Magistrates are interested in how BofA organised the acquisition of an 18 per cent stake in Parmalat's Brazilian unit in 1999 for two investment groups, Food Holdings and Dairy Holdings. Investors fear the two may be fronts for Mr Tanzi or his associates.
According to people familiar with the transaction, Citigroup's investment bank had found private equity investors ready to buy a stake in the Brazilian unit only to be turned away by Mr Tonna. Several months later, BofA came up with the two unknown investment groups.
Citigroup was on Monday named in the first shareholder lawsuit filed against Parmalat and its advisers in a New York court.
The suit names Mr Tanzi and Mr Tonna, Mr Zini's law firm, and auditors Deloitte Touche Tohmatsu and Grant Thornton International.
The plaintiffs are calling for the defendants to return more than $1bn in profits they allegedly reaped from falsely inflating Parmalat's earnings. The suit was prepared by Milberg Weiss Bershad Hynes & Lerach, a class action specialist, which has led similar claims against companies like Enron and Dynegy.
The suit is likely to be followed by several others on behalf of investors who bought billions of dollars worth of Parmalat securities in recent years.
Italy's tax police said on Monday night they had acquired documents indicating numerous financial transactions and account information involving Mr Zini's law firm.
Enrico Bondi, Parmalat's administrator, was on Monday night reported to have met restructuring advisers Mediobanca and Lazard. David McDonnell, chief executive of Grant Thornton International, admitted on Monday for the first time that the accounting firm's reputation had been damaged by the scandal.
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Lets see...Citigroup, B of A, Morgan Chase, Barkleys...
Look to the Caymans and other bank "secrecy" havens...most of it is built on "CD's" just as empty as that Italian Milk Company!!!
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