Prosecutors Seek Jail For Former Chief of Parmalat

Milan-based prosecutors requested a 13-year sentence for the founder of Italy's dairy giant Parmalat, Calisto Tanzi, who has been charged with market rigging.

Based in Parma, Parmalat collapsed in
2003 under the burden of more than €14 billion in
debt in one of Europe's biggest financial scandals. Emerging from
bankruptcy in 2005, the company has refocused on its core dairy
business, after Chief Executive Enrico Bondi recouped about €1.6
billion from banks in settlements, clawbacks and lawsuits.
Thousands of investors have piled into
Parmalat shares since the company was relisted in 2005, in the hope
of reaping strong dividends from billions of euros in damages from
the group's former creditors, among them the U.S.'s largest bank,
Citigroup. Banks and former auditors have denied any wrongdoing.
Mr. Tanzi and 23 other former
executives have been accused of fraudulent bankruptcy. There are two
ongoing criminal trials involving former Parmalat employees — one in
Milan and one in Parma.
The Milan trial, directly associated
with market manipulation, is seen closing first. The defense will now
have to respond to the prosecutions requests, before the Milan court
will reach a final verdict.