Parmalat Ex-CEO Cites Lack of Finance Skills

The founder and former chief executive of Italy’s Parmalat said he was aware of his group’s financial difficulties but not of the real situation of its balance sheet, a newspaper reported Sunday.

According to La Repubblica, Calisto Tanzi also said he was convinced that his “genius” ideas would counterbalance what he described as insufficient finance management skills.

La Repubblica quoted what it said were excerpts from a handwritten memo from Tanzi to Parma prosecutors investigating the financial scandal that has engulfed the Italian dairy giant. The remarks were published a day after Tanzi publicly apologized to those who suffered losses in the scandal and pledged to help prosecutors reconstruct the case.

“I take full responsibility for what happened,” La Repubblica quoted Tanzi as saying in the memo, “but I must also stress that -- as I was going after my dream of creating a big industrial and commercial enterprise -- I have under-evaluated [the importance of] my scarce knowledge of financial management.

“I entrusted the management to others, in particular to [Fausto] Tonna,” the former chief financial officer, Tanzi reportedly wrote.

Parmalat Finanziaria revealed in late 2003 that a $4.91-billion account with Bank of America did not exist. It then went into bankruptcy protection. An audit after the scandal broke put the company’s debt at eight times what Parmalat had claimed.

Tanzi reportedly said that although he knew of “Parmalat’s very grave debt, I was not aware of the real situation.”

He said he felt he had the support of Italian banks and added that “Tonna was telling me that from a financial point of view there was no problem because the banks knew the situation and the industrial plan,” according to the Rome-based daily.

The state-appointed Parmalat administrator, Enrico Bondi, contends the banks knew of Parmalat’s finances before its crash but continued to lend money. Bondi has filed lawsuits and recovery actions against dozens of banks.

The banks have insisted that they were victims of Parmalat’s fraudulent bookkeeping.

Tanzi spent months in jail or in hospital custody for treatment of health problems before he was allowed to live under house arrest. He was later freed on his own recognizance.

“I have committed a sin of presumption and pride because I believed that ideas that others called genius would counterbalance a deficient financial management,” Tanzi wrote, according to La Repubblica. He denied ever taking Parmalat money for himself.

Parma authorities are investigating charges of fraudulent bankruptcy, false accounting and criminal association.