Parmalat Is Sued on Behalf of U.S. Investors
Class-action law firm Milberg Weiss Bershad Hynes & Lerach plans to represent investors in a lawsuit it filed Monday against Parmalat, the Italian food company embroiled in a multibillion-dollar accounting scandal.
The lawsuit, filed in federal court in New York, is one of the first brought by U.S. investors who bought the company’s shares and bonds. In addition to Parmalat, the complaint names investment bank Citigroup Inc. and auditors Deloitte & Touche Tohmatsu, Grant Thornton SpA and Grant Thornton International as defendants.
Milberg Weiss is representing the Southern Alaska Carpenters Pension Fund and all other investors who purchased Parmalat securities from 1999 to 2003, according to the complaint.
Parmalat and its outside advisors concocted “a massive scheme” that involved overstating its profit and assets by billions of dollars for more than a decade, the complaint said.
The suit represents investors who held Parmalat’s American depositary receipts and bonds. U.S. investors have purchased an estimated $1.5 billion in Parmalat bonds.
Other defendants include former Parmalat Chairman Calisto Tanzi and former Chief Financial Officer Fausto Tonna, as well as Parmalat unit Bonlat Financing Corp. and Coloniale, the holding company owned by the Tanzi family that controlled Parmalat, New York-based law firm Zini & Associates and Buconero, a Delaware corporation set up by Citigroup.
In other developments, Parmalat’s former finance chief Monday insisted that the founder of the food company was to blame for the accounting scandal as investigators uncovered yet more secrets.
Tonna was taken from prison for more questioning by public prosecutors in Parma, the northern Italian city close to Parmalat’s headquarters.
Italian prosecutors have accused Tonna of helping build a web of offshore holding companies with fictitious assets that left the global food company with an accounting hole that investigators believe could exceed $12.7 billion. A judicial source said Tonna reiterated during an interrogation he had obeyed instructions from Parmalat founder Tanzi.
A source close to the probe said Monday that seized documents showed cash had been pumped into AC Parma, one of Italy’s top soccer clubs, which is owned by Parmalat, and more money was missing from a tourism business than feared.
