Pathe’s Chief Gets Prison Sentence in Italian Court

Pathe Communications Chief Executive Giancarlo Parretti has been sentenced to 46 months in prison by a court in Naples, Italy, for fraudulent bankruptcy stemming from the collapse of a small chain of Italian newspapers in 1981.

Parretti, who is currently trying to arrange financing for his proposed $1.2-billion bid to buy MGM/UA Communications Co., has already appealed the decision, and his chances of going to jail soon are extremely remote. But the verdict has further inflamed speculation that Parretti will be unable to complete the MGM/UA deal, which has been met with a high degree of skepticism on Wall Street.

Parretti’s sentence relates to the failure of Il Diario, a daily newspaper that was published between 1979 and 1981 and was owned by a company controlled by Parretti. In a 16-page decision issued Friday by the Naples court, the judge wrote that the parent company, Italafin SpA, failed to come up with promised capital and falsified financial records.

Under Italian law, two years of the sentence was automatically suspended and Parretti will remain free during the appeals process, which could last several more years.