Parmalat’s Founder and Bankers Are Charged

MILAN, -- A judge in Parma charged the founder of Parmalat and two powerful Italian bankers on Wednesday with playing key roles in the collapse of the dairy giant, which resulted in the largest corporate bankruptcy ever in Europe, The New York Times reported.

The judge, Domenico Truppa, indicted Cesare Geronzi, the chairman of the powerful investment bank Mediobanca, with fraudulent bankruptcy. Matteo Arpe, the former chief executive of the Rome-based bank Capitalia, who is considered one of the rising stars of the Italian financial world, was also charged with failing to act to stop the fraud that led to the spectacular implosion of Parmalat in 2003, the paper reported.

Geronzi and Arpe could not be reached for comment by the paper, but Capitalia in a statement said Geronzi was innocent.

The charges Wednesday contend that Geronzi and other Capitalia executives forced Parmalat to buy an unlisted bottled water company, Ciappazzi, for more than the market value to get access to credit for the Tanzi family’s tourism business, which was run by his daughter, the paper reported.

-- NYSSCPA.org News Staff

Posted on 7/26/07