Prosecutors have piled the pressure on Parmalat's former finance chief to reveal how billions of euros vanished from the food group as US banking giant Citigroup and Parmalat's accounting firms face legal action in the widening scandal.
After 11 hours of questioning yesterday, former chief financial officer Mr Fausto Tonna was again taken from prison to the prosecutors' office in the northern Italian city of Parma, close to the headquarters of the now-insolvent multinational.
Investigators have accused Mr Tonna of helping devise a web of offshore companies to hold fake accounts and non-existent assets that for over a decade fooled investors and regulators but eventually undercut one of Italy's biggest multinationals.
Mr Tonna said that he had followed orders from Parmalat's founder, Mr Calisto Tanzi, a judicial source said.
The 65-year-old Mr Tanzi has admitted to diverting some €500 million from the listed company into family funds but did not know how the misappropriation was carried out, judicial sources said.
The hole in Parmalat's accounts could exceed €10 billion, prosecutors say, making it one of the world's biggest corporate scandals and raising questions for Parmalat's auditors and some of the heavyweights of global finance.
A US class action law firm yesterday named investment bank Citigroup and auditing firms Deloitte & Touche Tohmatsu and Grant Thornton among defendants in a legal action brought against the food group, filed on behalf of a US pension fund.
The lawsuit was one of the first to be brought by US investors who bought Parmalat shares and bonds, and was believed to be the first publicly announced suit to name firms other than Parmalat.
Citigroup was not immediately available for comment. It was not clear why it was named in the US suit. The bank's ties to Parmalat include its helping to create "Black Hole", a vehicle used for loans between units in the Parmalat group.
Prosecutors have said an inner circle of Parmalat executives used intra-group loans to extract cash from the group. The Italian affiliate of Deloitte audited Parmalat's group accounts while Grant Thornton's Italian affiliate certified the Cayman Islands unit at the centre of the scandal.
Deloitte has said its 2003 mid-year report drew attention to concerns at Parmalat and it was required to rely on Grant Thornton Spa for the offshore units.
Prosecutors have accused the chairman and a partner of Grant Thornton Spa of helping to devise the fraud. The two auditors, who are among the eight people arrested so far in the case, have denied wrongdoing.