Bosses charged over Parmalat scandal

A MILAN judge has formally charged Parmalat founder Calisto Tanzi, plus 15 other executives and three financial institutions over their role in the scandal that plunged one of Italy's best-known brands into insolvency.

Judge Cesare Tacconi sent the executives to trial on Saturday, after eight months of preliminary hearings, on charges including market-rigging, false auditing and hindering the work of regulators.

The Italian offices of Bank of America, auditors Deloitte & Touche and the former Italian affiliate of Grant Thornton were also charged with helping dairy group Parmalat mislead investors. One of Italy's best-known food companies, with diary products and juices lining the shelves of the country's supermarkets, Parmalat stunned investors in 2003 when it revealed a €4 billion bank account did not exist.

Under Italian law, companies can stand trial, facing possible fines or even enforced closure if found guilty. Two Deloitte partners and three Bank of America employees were also indicted as individuals.

Bank of America and Deloitte have denied wrongdoing. Grant Thornton severed ties with its Italian unit in the weeks after the €14 billion accounting scandal broke. The first hearing is set for September 28.

Milan prosecutors have been investigated for suspected financial crimes since Parmalat filed for insolvency in December 2003. In May last year, they asked a judge to send 29 executives and three companies to stand trial.

Since then, two auditors of the former Italian unit of Grant Thornton have been sent to trial, skipping preliminary hearings.

Eleven executives, including three former Parmalat chief financial officers, have asked the Milan judge to plea bargain and are seeking reduced sentences.