Parmalat will this week ask creditor banks for new loans to keep its factories running, as prosecutors broaden a multibillion euro fraud inquiry to examine the role of financial institutions.
A week after the arrest of founder Mr Calisto Tanzi, investigators are striving to unravel a complex web of shell companies, offshore units and loans used by the now insolvent food and dairy group to mask its crumbling finances.
Turnaround expert Mr Enrico Bondi, who took over at Parmalat in mid-December just as the group's troubles exploded into an international scandal, will begin a series of meetings with bankers today. He is expected to ask Parmalat's main banks, including Capitalia, Intesa and San Paolo IMI, for €50-€100 million to pay wages and suppliers.
That would be well above the loan of roughly €25 million that banks granted Parmalat in December to avoid default on an outstanding bond. The three banks' exposure to Parmalat debt already exceeds €1 billion.
Three suspects in the affair have denied involvement in fraud as investigators in Italy and the US continue to search offices, analyse documents and question people caught up in the scandal.
Mr Lorenzo Penca and Mr Maurizio Bianchi, of auditor Grant Thornton's Italian affiliate, and Mr Gian Paolo Zini, a lawyer who worked with Parmalat, were questioned by magistrates in Italy over the weekend but denied any wrongdoing, their lawyers said.
Grant Thornton is fighting to stop the Parmalat scandal from undermining confidence in its global network of businesses outside Italy. The British and US businesses, Grant Thornton's two biggest units, are mailing their clients to reassure them they were not involved in Parmalat's audit. The accounting firm has signalled it is ready to expel its Italian business if serious wrongdoing is uncovered by investigations.
As investigators prepared to resume their work today with more questioning of Mr Fausto Tonna, a former Parmalat finance director, Mr Giulio Tremonti, Italy's finance minister, said he wanted to create a financial market regulatory authority to minimise the risk of a similar scandal in the future. "We know that the present situation must be reformed," he said yesterday.
Eight people, including Mr Penca, Mr Bianchi, Mr Zini and Mr Tanzi, Parmalat's founder and former chief executive, have been arrested since December 27th on suspicion of offences ranging from providing false information to auditors to rigging markets and fraudulent bankruptcy. No one has yet been formally indicted.
Mr Tanzi has admitted diverting about €500 million from Parmalat's main business to other family-owned operations, notably Parmatour, a loss- making tourism company. But he frustrated investigators on Saturday by throwing no more light on the location of most of the €8 billion that he estimates is missing from Parmalat's accounts.
The spotlight has also turned on big international banks. A senior inspector from the Securities and Exchange Commission was quoted this weekend as saying authorities were investigating the way Bank of America and other banks sold billions of euros worth of Parmalat bonds.
- (Financial Times Service).
