Accounting firm dumps Italian affiliate

Accounting firm Grant Thornton has said it has cut ties with its Italian unit involved in the Parmalat food group scandal .

The firm said it decided to expel the Italian affiliate from its international network because it had lost confidence in the unit, which vouched for the books of a Parmalat subsidiary at the heart of the scandal.

As recently as ten days ago the accounting firm had stood by its Italian unit, Grant Thornton SpA , and said initial results of its investigation had shown that the arm had cooperated fully with authorities.

The Italian arm audited some Parmalat subsidiaries, including Bonlat, a Cayman Islands based unit that reported a fictitious €3.95bn bank account on its books.

Magistrates have accused Grant Thornton SpA of cooperating and devising the scandal at Parmalat, and its former chairman and senior partner were arrested by Italian police last week.