Parmalat executives arrested in fraud case

PARMALAT Finanziaria’s former chief financial officers Fausto Tonna and Luciano Del Soldato are among six executives arrested by the Italian police today as part of a probe into the collapse of Italy’s largest food company, sources familiar with the investigation said.

Oreste Dominioni, a lawyer for Tonna, confirmed that his client is in police custody.

Another three arrest warrants have been issued, said the sources who declined to be named.

The executives the police have arrested or plan to arrest include Paolo Zini, a legal adviser to Parmalat, two Parmalat accountants and two executives from Grant Thornton Group SpA, the sources said. Grant Thornton was the auditor of 17 Parmalat units.

Nan Williams, a spokeswoman for Grant Thornton at Four Communications plc in Britain, had no immediate comment.

Parmalat, the maker of Archway cookies, Pomi pasta sauces and Sunnydale Farms milk, was declared insolvent Saturday by a Parma court. Founder Calisto Tanzi is in jail and being investigated for fraud.

“Justice hasn’t usually come down so hard in Italy,” said Claudio Morsenchio, a fund manager at Banco Emiliano Romagnolo SpA.

“The arrests are a strong signal that the system wants to get to the bottom of all this.”

Mr Tanzi told the dairy company’s new chief executive officer, Enrico Bondi, that he would find a “hole’ of about 8 billion in Parmalat’s accounts, according to court documents. He didn’t tell him where to find the cash. The company’s founder, aged 65, told Mr Bondi to “go and check out everything”, the documents show.