New Arrest in Parmalat Scandal, Accounting Firms Named in Probe
Milan magistrates launched formal investigations into Deloitte & Touche’s Italian branch and the former Italian arm of Grant Thorton. Four top executives from the two companies were already under investigation as individuals, but now the two Italian firms themselves are included in the probe, Reuters reported.
Both companies could potentially face criminal charges, as Italian prosecutors attempt to unravel who is responsible for the multibillion-dollar accounting scandal, the Financial Times reported.
The firms contend they were the victims of fraud by company executives. Grant Thornton SpA served as Parmalat's chief auditor from 1990 to 1999, when it was replaced by Deloitte & Touche SpA. Grant Thornton stayed on to review the books of Parmalat’s Cayman-Islands finance company Bonlat, which is at the center of the controversy.
While Grant Thornton recently severed its ties with the Italian affiliate, a London spokeswoman for Deloitte & Touche said the umbrella group was "absolutely not" considering excluding its Italy unit from the global network.
Magistrates in Parma, meanwhile, arrested Franco Gorreri, former chairman of the Banca del Monte di Parma and a Parmalat director until 1992. Gorreri temporarily stepped down from his post at the small regional bank last week because he was under investigation for alleged fraudulent bankruptcy and false corporate statements in the Parmalat case.
While Gorreri was arrested Monday, two men were released from prison the same day. Fausto Tonna, Parmalat's former chief financial officer, and Gianfranco Bocchi, one of its former internal auditors, were allowed to return to work at the company’s headquarters. Both agreed to help prosecutors study documents connected to the case.
Tonna, once the right-hand man to founder Calisto Tanzi, is considered a key figure in revealing the details of the fraud and the manipulation of the company’s financial records.