Italy Holds Parretti in Fraud Case : * Legal: The former head of MGM-Pathe is detained in Sicily for questions on tax evasion.

From Times Staff and Wire Reports

Giancarlo Parretti, who is engaged in a court fight for control of MGM-Pathe Communications Co., was taken into custody Friday by Italian police in connection with a tax-fraud investigation.

The Italian news agency ANSA and other news sources reported that Parretti was stopped and taken to jail as he waited to board a plane bound for Tunisia at Rome's Ciampino Airport.

Parretti, a 50-year-old Italian financier, has been under investigation by Roman and Sicilian judges for alleged tax evasion by his Italian-based companies, according to reports. Parretti holdings based in Italy range from hotels to movie theaters.

An Italian prosecutor said the investigation centers on unpaid taxes of about $110 million. Parretti was previously convicted in a Naples court on charges of fraudulent bankruptcy in a case involving the 1981 collapse of a Naples newspaper. He has appealed that ruling.

Richard Kline, a Parretti spokesman in Los Angeles, said there have been no "formal charges" filed in the tax-evasion investigation. Parretti has been transported to a facility near the Sicilian city of Syracuse, where he will be questioned on Monday, Kline said.

"There haven't been any charges filed and he has not been formally arrested," Kline said. "We're still trying to find out what he was doing (when he was detained) and where he was going. The whole thing is quite strange, because he travels to and from Italy regularly."

Parretti made headlines last year when his Beverly Hills-based Pathe Communications Corp. purchased the historic MGM movie studio from financier Kirk Kerkorian for $1.3 billion.

Though Parretti said he planned to build an international entertainment empire, his dreams collapsed last May when massive debts forced him to surrender control of the company to his chief financial backer, Credit Lyonnais. Soon afterward the French bank kicked Parretti and his allies off MGM's board on grounds that he had interfered with studio management.

The fate of MGM now rests with a Delaware chancery court that has been asked to determine whether Parretti or Credit Lyonnais has lawful claim to the financially troubled studio.

Parretti has been plagued by other business difficulties since his problems with MGM began. He recently announced that an unnamed Middle-Eastern businessman has offered to buy out his majority stake in MGM, but the claim has been discounted by others.

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