Investigators examining the collapse of Parmalat yesterday raided the Milan offices of Bank of America (B of A) and the home of a B of A executive who left to join the dairy group this summer, as magistrates stepped up efforts to find the company's missing billions.
The raids follow accusations by a former chief financial officer of Parmalat that Mr Luca Sala, a B of A executive, helped create "ad hoc" trusts that bought up the unsubscribed portions of private bond placements.
According to transcripts of the testimony of Mr Alberto Ferraris, Parmalat chief financial officer between March and November of last year, he had difficulty understanding the group's finances when Mr Sala left B of A because "from the documentation that I had on Parmalat you couldn't understand a thing".
B of A has been at the centre of the investigation into the dairy group's implosion since December 17th, when it said documents with the B of A logo claiming that Parmalat had €3.95 billion in a B of A account in New York were fake. No such account exists - although Grant Thornton, one of Parmalat's auditors, used the faxed documents to approve part of the group's balance sheet.
The faked €3.95 billion account is but one chunk of an estimated €10 billion investigators fear is missing from Parmalat's balance sheet.
B of A was responsible for arranging all of Parmalat's non-144A private debt sales in the US, according to data from Thomson Financial. The bank placed some $743 million of debt privately for Parmalat between 1997 and 2002, the data show. The private nature of the debt sales, arranged mostly for US life assurance companies, meant they did not have to be registered with the US Securities and Exchange Commission.
Meanwhile, Grant Thornton yesterday defended its decision to expel its Italian business, after the operation attacked the move as "unfair and arbitrary".
The unit audited up to 49 per cent of the assets of Parmalat, the Italian milk group at the centre of fraud allegations. The former chairman of Grant Thornton's Italian affiliate and a partner there are among nine people so far detained by investigating magistrates.
Mr Lorenzo Penca and Mr Maurizio Bianchi are accused by magistrates of the falsification of Parmalat's balance sheet and helping Mr Calisto Tanzi, Parmalat's founder, to embezzle funds through Bonlat, a subsidiary in the Cayman Islands. Both deny any wrongdoing.- (Financial Times Service)
