Italy's Parmalat founder sentenced to 18 years in prison over fraud

08:53, December 10, 2010      

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Founder and former CEO of Italy's leading food firm Parmalat Calisto Tanzi was sentenced on Thursday to 18 years in prison for his role in the dairy multi- national fraud scandal in 2003.

According to local press, Tanzi was convicted by a court in northern city of Parma for criminal association and fraudulent bankruptcy, which resulted in estimated debts of 14 billion euros (18.5 billion U.S dollars).

Other Parmalat managers were also sentenced to prison terms over Europe's biggest ever false accounting scam, and ordered to pay the firm 2 billion euros (2.6 billion U.S. dollars) and compensate thousands of defrauded investors.

Tanzi, 72, had already been given a 10-year jail sentence for stock market manipulation following an earlier trial, but he had appealed against the conviction.

His lawyer said that his client "was not expecting such a severe sentence", adding that Tanzi maintained his innocence and will appeal against the latest conviction as well.

Parmalat went bankrupt in December 2003 after it emerged that the group had been in trouble for many years, surviving only on the back of massive falsifications of its balance sheets and sophisticated financial instruments.

Before the collapse, the food conglomerate employed around 36, 000 people in more than 30 countries.

It emerged from bankruptcy protection and re-listed on the Milan Stock Exchange in 2005. Current Parmalat management took legal action against a few banks, including Citigroup and Bank of America, for their role in its crack.

Source: Xinhua


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