Founder of Food Empire Arrested
The founder of Parmalat was formally arrested Sunday in a criminal investigation into a growing financial scandal at the insolvent Italian food company, but his lawyer said no money had been stolen.
Michele Ributti, an attorney representing founder Calisto Tanzi, denied allegations that as much as $12 billion is missing. Tanzi is suspected of fraud and misappropriating company funds, although he has not yet been charged.
Late Sunday, judicial sources said a Milan judge formally placed Tanzi under arrest on suspicion of market rigging and false auditing -- a more serious step under Italian law that enables police to keep him in custody.
His arrest comes one day after Parmalat was declared insolvent. The move allows it to remain in operation and to put its financial creditors on hold while a recovery plan is drawn up.
Tanzi was first seized by police Saturday after returning from a trip. He was taken to a Milan jail under a 48-hour detention order and questioned for more than six hours Sunday by officials from both Milan and Parma, a city near Parmalat’s headquarters.
The scandal erupted earlier this month when Parmalat, which has 35,000 employees in about 30 countries, revealed a gaping hole in its accounts.
U.S. auditor Grant Thornton, meanwhile, has denied allegations that it falsified accounts at a Parmalat unit at the heart of the investigation.
On Sunday, Grant Thornton said it would send executives to Italy to aid in the investigation and would examine how its auditors failed to identify at least $4.9 billion missing from Parmalat’s accounts.
