The 'trial of the century' dealing with Europe's biggest corporate failure opened here on Friday but was adjourned to allow judges time to decide on a defence request to unify other trials related to the financial meltdown of Italy's dairy and food multinational Parmalat. A total of 24 people, including Parmalat founder Calisto Tanzi and his ex-chief financial officer Fausto Tonna, stand accused in the main trial 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 two 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.
At the opening of the main trial, defense attorneys asked that all three trials be unified in order to allow judges to understand the ''full picture'' of the ''complicated Parmalat affair''. The prosecution objected to the unification saying 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.
Lawyers representing thousands of small investors who lost their savings when Parmalat defaulted on its debt are also opposed to unifying the Parmalat trial here.
The small investors have filed to be so-called 'civil parties' who would be eligible for compensation in the event of a guilty verdict.
Aside from seeking to have the Parma trial 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.
TRIALS CONTINUE IN MILAN.
Parmalat's meltdown is also the subject of two trials in Milan dealing with alleged crimes involving the Milan stock exchange.
In the first 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.
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.
This enabled him to successfully bring Parmalat back to the stock market.
The company closed 2007 with annual turnover up 6.3% and expected net profit to amount to some 550 million euros, a sharp rise on 2006.
Tanzi founded Parmalat in 1961, building up his father's salami business into one of the world's top 25 dairy and food groups.
