Parmalat Suits Start Piling Up, Deloitte and Grant Thornton Dropped as Auditors

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Three law firms have said they filed or started lawsuits against Parmalat, dubbed (Europe's Enron), the Italian food giant that is enmeshed in a multibillion-dollar accounting scandal.

On Wednesday, Parmalat's court-appointed administrator formally dropped Deloitte as one of the group's auditors, following the move earlier this week to remove Grant Thornton, the other auditor.

Meanwhile, prosecutors in Italy spent two morning-to-night sessions questioning Parmalat's former finance chief, Fausto Tonna, about how the billions of euros vanished from the food company, Reuters reported.

Investigators accuse Tonna of helping develop a network of offshore firms to hold fake accounts and nonexistent assets.

Back in New York, the law firm of Milberg Weiss Bershad Hynes & Lerach LLP, a key player in investor suits against Enron Corp., said it filed suit Monday on behalf of the Southern Alaska Carpenters Pension Fund. Schiffrin & Barroway LLP followed up with its own announcement Tuesday that it, too, had filed suit in a New York court.

Both suits name investment bank Citigroup Inc., its unit Buconero and Parmalat auditors Deloitte & Touche Tohmatsu, Deloitte & Touche SpA, Grant Thornton International and Grant Thornton SpA as defendants. At least two of the suits allege that Citigroup created special purpose vehicle, "Buconero," which is Italian for black hole, to be used for loans among the units in the Parmalat group.

The law firm of Charles Piven said it "commenced" a class action on behalf of those holding Parmalat Finanziaria SpA securities. Only Pamalat is named in that suit.

Representatives of Citigroup and Deloitte & Touche USA, said they have not seen the lawsuits and could not comment. A spokeswoman for Grant Thornton International said she did not have information about the suits at the moment and was therefore unable to comment.

In other developments in the deepening scandal, the SEC has indicated that it may look into whether American underwriters who sold Parmalat bonds committed fraud, the New York Times reported.

Also, Italian prosecutors are asking some of Europe's biggest banks about their connections to Parmalat. Media reports have said the investigators want details on a 5 percent stake in Parmalat held by Deutsche Bank until Dec. 19, the day the crisis broke with the revelation of a fake 3.95 billion euro account. A document confirming the account was apparently forged onto Bank of America letterhead, and the document was verified by Grant Thornton SpA and used to certify the 2002 accounts of Bonlat, Parmalat's Cayman Islands unit that is at the center of the controversy.

Earlier this week, the company formally filed for bankruptcy protection as the Industry Ministry appointed an expert to develop a restructuring plan to save the Parma, Italy-based company, which employs thousands worldwide.

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