More arrests in Parmalat scandal

Police were carrying out a new round of arrests in the Parmalat dairy company financial scandal in Italy today.

A police official in Bologna confirmed that “activity is underway” by Bologna’s financial police concerning the case against the bankrupt dairy company, but he declined to comment further.

The ANSA and Apcom news agencies said police were detaining officials in Parma and Milan based on new warrants from the Parma prosecutors’ office.

Parmalat’s founder Calisto Tanzi admitted yesterday his company was milked of hundreds of millions of pounds, and a judge ordered him jailed pending indictment in what regulators called “one of the largest and most brazen corporate financial frauds in history”.

In a written ruling, Judge Guido Salvini cited the “concrete risk” that Tanzi might try to tamper with evidence or flee if he were freed, and called Tanzi’s statements claiming to have had no knowledge of any falsification of Parmalat documents “improbable”.

The ruling came after Tanzi spent the day under questioning from prosecutors trying to shed light on the financial crisis that put the milk and juice giant, Italy’s eighth largest company, into bankruptcy protection.

His lawyers said he had conceded that hundreds of millions of euro were shifted from the company, primarily to travel businesses also controlled by the Tanzi family.

But Tanzi continued to insist that any illegal acts had been carried by top financial managers on their own initiative. Prosecutors say as much as €848.7m may have been misappropriated.

Parmalat was declared insolvent and placed under the supervision of turnaround expert Enzo Bondi after it was revealed the company’s Bonlat subsidiary in the Cayman Islands did not have €4bn it had claimed was in a Bank of America account.