2010-12-10 13:10:39
Calisto Tanzi (taken in 2006) Parmalat founder Calisto Tanzi had already been
sentenced for separate offences
The founder and former chief executive of Italian food conglomerate Parmalat
has been sentenced to 18 years in jail for his role in a fraud at the firm.
Calisto Tanzi was convicted of criminal association and fraudulent bankruptcy.
A court also ordered former Parmalat executives to pay the firm 2bn euros (
2.7bn; 1.7bn) and reimburse thousands of defrauded investors.
Parmalat collapsed in 2003 with a 14bn-euro hole in its accounts in what was
Europe's biggest bankruptcy.
Some 135,000 investors lost the money they had invested in Parmalat's corporate
bonds, and about 30,000 of them were listed as complainants in the case.
They are expected to share compensation worth an estimated 30m euros, as
ordered by the court.
A representative of the investors told Italian television: "I believe [this
sentence] is right, since these people have caused much pain and despair to
many people. And it's right for them to pay for it."
Parmalat history
huge debts
contain 4bn euros of company cash was fictitious
euros
The judge in the city of Parma, from where the company gets its name, also
sentenced the company's former financial director Fausto Tonna to 14 years in
prison.
Tanzi's brother Giovanni was sentenced to 10 years, seven months.
'Debt factory'
At the time of its collapse, Parmalat was employing about 36,000 people in 30
countries.
And although the scandal only emerged in December 2003, the trial prosecutors
said the group had been struggling for many years, surviving in part because of
fraud on its balance sheets.
"Parmalat was the symbol of a sick system and the biggest debt factory of
European capitalism," investigator Lucia Russo said during the hearing.
Tanzi, 71, had already been given a 10-year sentence for stock market
manipulation, following an earlier trial in Milan, but had appealed.
His lawyer, Giampiero Biancolella, said that his client maintained his
innocence and would also appeal against the latest conviction.
This appeal means that he will not be imprisoned pending a final ruling by
Italy's Supreme Court, BBC Rome correspondent David Willey says.
Parmalat was relisted on the Milan stock exchange in 2005 - without its
loss-making foreign divisions.
Current Parmalat management and investors took legal action against several
banks, including Bank of America and Citigroup, for their role in its collapse.
Parmalat has recouped more than 2bn euros in settlements.