Deloitte & Touche: Parmalat auditors to stand trial

Two of Italian food giant Parmalat’s former auditors are to stand trial over their alleged role in the financial scandal that struck the firm last year.

Former Grant Thornton employees Maurizio Bianchi and Lorenzo Penca are to be prosecuted for market-rigging, a Milan court ruled on Tuesday. The pair are the first to be indicted over the Parmalat scandal.

The court must now decide whether 27 others, including Parmalat founder Calisto Tanzi, should face prosecution.

Also in the dock are three companies – the Italian offices of Bank of America and of audit firms Deloitte & Touche and Grant Thornton.

They are accused of helping a group made up of senior Parmalat managers and a handful of external bankers and auditors to conceal the true state of the company’s finances.

All three companies deny wrongdoing.

Bank of America said on Tuesday: “We are confident that this procedure will result in a finding that the facts do not support the administrative charge against Bank of America.”

The hearing in Milan will be closely watched by Parmalat shareholders, including thousands of small investors, who lost money when the company went into financial meltdown.

Parmalat was declared insolvent late last year after it emerged that 4 billion euros (£2.8bn; $4.8bn) it supposedly held in an offshore account did not in fact exist.

The firm’s demise sent shock waves through Italy, where its portfolio of top-selling food brands and its position as the owner of leading football club Parma had turned it into a household name.

Now run by court-appointed administrators, the company is attempting to sell off many of its foreign subsidiaries and reduce its workforce as part of a financial restructuring plan.

It has also launched multi-million euro lawsuits against its former banks, alleging that they turned a blind eye to irregularities in its books while its former management was in charge.