Judges in the main trial examining the financial meltdown of dairy and food multinational Parmalat have denied a defense request that two related proceedings be incorporated to create a single 'maxi-trial'.
The 'trial of the century' dealing with Europe's biggest corporate failure opened March 14 but was adjourned to allow judges time to decide on the defence request to unify the trials being staged in Parma, where Parmalat has its headquarters.
A total of 24 people, including Parmalat founder Calisto Tanzi and his ex-chief financial officer Fausto Tonna, stand accused in the main trial here on charges including fraudulent bankruptcy, accounting fraud, issuing false financial statements and criminal conspiracy.
Most of the 24 along with others are also on trial in related proceedings focusing on Parmalat's acquisition of the mineral water company Ciapazzi and the bankruptcy of Parmalat's tourism division Parmatour - bringing the total number of defendants to 56.
According to attorneys for almost all the defendants, all three trials needed to be unified to allow judges to have a ''full picture'' of the ''complicated Parmalat affair''.
In its ruling on Tuesday, the court said that holding separate trials did not compromise the ability of lawyers to defend their clients and that the trials dealing with the minor offenses would speed up the whole judicial process.
The prosecution had objected to the unification arguing that this would stretch out the whole trial period and potentially allow defendants to escape conviction because of the five-year statute of limitations set for the trial and its two subsequent appeals, as allowed by Italian law.
''This appears to us to be a defence ploy to ensure that the trial never makes it to the end,'' observed one public prosecutor in March.
Aside from seeking to have the Parma trials united, Tanzi and other defendants have also presented a list of over 33,000 potential witnesses, most of whom were Parmalat bond and shareholders.
The defence said this was not to draw out the trial but because it wanted to demonstrate that while the defendants were in part responsible for Parmalat's financial situation, the banks which sold shares and bonds to small investors did so knowing that the multinational was insolvent.
FOURTH PARMA TRIAL IN PREPARATION.
A fourth trial related to Parmalat's collapse is also in preparation and deals with Parmalat's 1999 purchase of milk company Eurolat from Cirio, another food giant which subsequently went bankrupt.
Top Italian banker Cesare Geronzi was ordered last month to stand trial for extortion for allegedly pressuring Parmalat to buy Eurolat at an inflated price.
Prosecutors believe that Geronzi, when he was chairman at Banca di Roma, later Capitalia, threatened to cut off Tanzi's credit line unless Parmalat bought the milk company.
The operation raised eyebrows because proceeds from the sale, valued at some 168 million euros, were given directly to Banca di Roma, which not only had lent large sums of capital to Cirio but was also involved in placing both Parmalat and Cirio bonds with small investors.
The bonds became practically worthless when the two food multinationals collapsed.
Geronzi recently became chairman of Italy's influential merchant bank Mediobanca, after Capitalia was incorporated into Unicredit to create Italy's biggest bank.
While admitting his own responsibility, Tanzi has long claimed that he was manipulated by Parmalat's creditor banks, in particular Banca di Roma-Capitalia.
Tanzi told prosecutors that he was also pressured by Geronzi into buying Ciappazzi for ''a very high price with respect to its real value'', despite Parmalat's dire financial situation.
Geronzi is among several defendants already on trial for the Ciappazzi affair, accused of fraudulent bankruptcy and extortion.
The veteran banker was ordered to stand trial in Rome last September on charges of fraudulent bankruptcy and false accounting for his alleged role in Cirio's collapse.
Cirio went under in July 2003 after defaulting on more than one billion euros in bonds. It became the first Italian company to double-default on a bond issue.
MILAN TRIALS.
Parmalat's meltdown is also the subject of two trials in Milan dealing with alleged crimes involving the Milan stock exchange.
In the first Milan trial Tanzi and 15 other defendants stand accused of charges including including market rigging, false auditing, misleading investors and hindering the regulatory activities of bourse watchdog Consob.
The defendants include former Parmalat and Bank of America employees, two ex-Deloitte & Touche auditors and two auditing firms, the former Italian unit of Grant Thornton and the Italian office of Deloitte & Touche.
In the second trial, 13 individuals and five international banks - Bank of America, Morgan Stanley, Deutsche Bank, UBS and Citigroup - are accused of share-price manipulation and organizing bond issues to cover their own potential losses, in the event Parmalat defaulted on loans they had extended to it.
PARMALAT MELTDOWN BEGAN FIVE YEARS AGO.
Parmalat was declared bankrupt in December 2003 after it emerged that four billion euros it supposedly held in an offshore Bank of America account did not in fact exist.
The case escalated, eventually leading to Parmalat's collapse amid debts of some 14.5 billion euros and a fraud scandal which rocked the Italian financial world.
From 1990 until 2002, Parmalat lost money every year except one but nonetheless reported uninterrupted profits and routinely forged documents in order to deceive banks and regulators.
The US Securities and Exchange Commission called the case ''one of the largest and most brazen corporate financial frauds in history''.
Parmalat's bankruptcy - dubbed 'Europe's Enron' - left more than 150,000 investors with virtually worthless bonds.
Parmalat has since been put back on its feet by corporate turnaround expert Enrico Bondi who, first as government-appointed administrator and later as official CEO, shed the group's non-core activities, cut foreign activities and reduced staff.
