Investigation of Parmalat Widens

Two Italian auditing firms linked to two of the top names in global accountancy were put under investigation Monday by prosecutors trying to work out how billions of euros went missing at dairy giant Parmalat.

Judicial sources said the Italian affiliate of Deloitte & Touche and the recently expelled unit of Grant Thornton in Italy were included in the fraud probe.

Four top auditors were already under investigation as individuals, but now the two companies are included in the probe, the sources said.

Grant Thornton’s Italian office has been at the center of the food group’s crisis since it broke a month ago, when a nearly $5-billion bank account supposedly held by a Parmalat unit in the Cayman Islands was exposed as false.

The former chairman of Grant Thornton and a partner, who vouched for the offshore unit, are among 10 people now under arrest in the case. The affiliate has since been expelled by the global auditor.

Deloitte & Touche certified Parmalat’s group accounts, and two partners of the Italian unit are under investigation.

No one was immediately available for comment at Grant Thornton’s former Italian unit, now called Italaudit. Deloitte & Touche had no comment.

A London spokeswoman for Deloitte & Touche said the umbrella group was “absolutely not” considering the exclusion of its Italy unit from the global network.

Also Monday, an ex-finance director and an internal auditor of Parmalat were taken from prison to the headquarters of the now insolvent food group, as investigators tried to reconstruct its accounts.

Fausto Tonna and auditor Gianfranco Bocchi have been accused by prosecutors of being involved in fraud leading to the multibillion-dollar scandal.

Both men have said they were only following orders.

They were driven to the offices of Parmalat in Collecchio, near Parma, where a team of auditors from accounting firm PriceWaterhouseCoopers also was present to try to rebuild the food group’s accounts, an investigative source said.

PriceWaterhouseCoopers was hired last month to carry out an emergency inspection of Parmalat’s accounts for the new management team now in charge of the group.

Also Monday, a judge in Milan threw out the latest request for Parmalat founder Calisto Tanzi to be moved from the city’s San Vittore jail to house arrest, a judicial source said.

Investigators in Parma and Milan are piecing together how Parmalat’s top management might for years have concealed a hole in the multinational’s accounts, which prosecutors say could turn out to be bigger than $12.7 billion.

At the center of the scandal lie forged bank documents, inflated invoices and shell holding companies in tax havens, prosecutors have said.

Also under scrutiny are Parmalat’s dealings with banks, including the sale of bonds by the food group.