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Tuesday, January 13, 2004

Parmalat hopes to save dairy unit


Rescue team counts on sale of global sections

The Associated Press

ROME - A restructuring team looking to save embattled food giant Parmalat will likely try to sell the company's international units but hopes to keep the core domestic dairy business in Italian hands, a government minister said Monday.

Parmalat, Italy's eighth-largest company, entered bankruptcy protection last month after the company acknowledged massive and long-concealed holes in its accounts. Investigators have arrested nine people alleged to have fraudulently concealed the company's true finances, including Parmalat founder Calisto Tanzi.

Newspaper reports said Monday that a former Parmalat chief financial officer has accused Tanzi of taking kickbacks from a Swedish food packager. In Sweden, the food packager said it was looking into the claims.

Also Monday, the ANSA news agency, citing leaked depositions, said former Parmalat financial official Alberto Ferraris told prosecutors last month that Parmalat's debts were at least 13.5 billion euros ($17.3 billion) as of October - far higher than the company then acknowledged. ANSA also said Tanzi told investigators he had been unaware of the company's true finances until recent months.

The Italian investigation was expected to focus this week on what role if any Italian and foreign banks played in the scandal. Prosecutors have been trying to ascertain whether the banks knew Parmalat's true state of affairs when they sold bonds for the company.

Milan judicial officials, who said last week that a former Bank of America employee who went on to consult for Parmalat was a suspect in the case, questioned the man's former assistant Monday. They also spoke with two of Tanzi's airplane pilots, apparently to clarify an overseas trip after the scandal broke that he has described as a vacation.




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