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Italy: Market Regulator Seeks Damages in Parmalat Trial

Source: Reuters
09/10/2008

Milan, Oct 9 - Italian market regulator Consob is seeking 6 million euros ($8.2 million) damages from food company Parmalat SpA in a trial over its 2003 collapse, one of Europe's biggest financial scandals, a court heard on Thursday.

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Former Chief Executive Calisto Tanzi is among eight former executives and bankers on trial in Milan for market-rigging or obstructing market oversight.

Consob is seeking the sum for monetary and non-monetary damages. Emanuela Di Lazzaro, a lawyer representing Consob, said in court Tanzi was responsible for "false communication and false information to the market".

She said the market had been "betrayed by information that was incomplete, misleading and mendacious."

Prosecutors are seeking a 13-year prison term for Tanzi and sentences ranging from three years and six months to six years for the other defendants.

They also asked for a 300,000 euro fine and confiscation of 600,000 euros from auditor Italaudit, formerly Grant Thornton.

This is the first time prosecutors in the trial have recommended a jail sentence for Tanzi. A verdict in the case is not expected for several months.

Parmalat buckled in 2003 with a 14 billion euro hole in its accounts. Its demise wiped out the savings of more than 100,000 private investors.

Prosecutors have said the accused misled markets by masking Parmalat's dire finances. Eight others accused in the case settled out of court in September.

The main trial over the collapse began in the northern Italian city of Parma, near Parmalat's headquarters, in March.

Parmalat, along with its former executives, auditors and banks, also faces a class-action lawsuit in the United States, among other trials.

Parmalat was restructured and relisted on the Milan bourse in 2005. Italy's biggest listed food company, it has recouped money from banks in settlements.



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