CALISTO TANZI, founder and former chief executive of the Parma-based food conglomerate Parmalat, yesterday received an 18-year sentence in a Parma court for his role in the company’s 2003 collapse.
Some 135,000 private investors lost their savings as Parmalat failed in a €14 billion euro collapse that quickly earned itself the unwelcome epithet of “Europe’s Enron”. The group’s Dublin-based Eurofood subsidiary was central to its complicated structure.
Initial investigations revealed that the group, once considered one of the jewels of Italian industry employing 36,000 people in 30 countries, had in fact been trading fraudulently for years.
In his defence, Mr Tanzi argued that he and his company were victims of the banking credit system whilst he has regularly accused various banks of continuing to sell Parmalat bonds to small-time investors even when they knew all too well that the group was insolvent. Lawyers for Mr Tanzi confirmed he will appeal the sentence.
Parmalat, which was relisted on the Milan stock exchange in 2005 without its loss-making foreign divisions, has subsequently taken legal action against several banks, including Citigroup, Deutsche Bank, Morgan Stanley and Bank Of America, for their role in its collapse. In recent years, Parmalat is estimated to have recouped more than €2 billion euro in settlements.
Present for yesterday’s sentencing was 40-year-old Andrea Cogo, who cycled 268km from Treviso to hear the court’s verdict. A motor bike factory worker, Mr. Cogo had the misfortune to invest almost his entire savings, some €70,000, in Parmalat bonds just two days before the collapse. Since then, he has campaigned actively, but with little success, in an attempt to see private investors at least partly reimbursed.
Despite yesterday’s verdict, however, 72-year-old Mr Tanzi will almost certainly not serve a prison term.
The so-called “Save Previti” law, passed in December 2005, rules that anyone over 70 years of age is exempt from serving time in prison “provided that the person in question is not a habitual, tendential or professional delinquent nor that he/she has a previous conviction”.
