Chairman of Parmalat's Cayman subsidiary turns himself in to Italian authorities

Saturday, January 10, 2004

MILAN, Italy (AFP: Giovanni Bonici, wanted by police in connection with his actions as the former chairman of Bonlat Financing Corporation, Parmalat's subsidiary in the Cayman Islands, returned to Italy from Venezuela last week. Bonlat had a central role in the multibillion-dollar fraud scandal at the Italian food and dairy giant.

Bonici had been named with seven other people in a Dec. 31 arrest warrant issued by Parma prosecutors but could not be served on him while he remained in Venezuela. Authorities suspect them of committing fraud that resulted in Parmalat's bankruptcy, as well as false accounting.

Eight others have been detained in connection with the affair, including Parmalat founder Calisto Tanzi and former financial director Fausto Tonna.

Two partners of the accounting firm Grant Thornton -- which certified Parmalat's books until 1999 before handing them over to Deloitte and Touche -- have also been detained, although none of the nine has been formally indicted.

In separate developments last week, investigators tracking leads in the spreading Parmalat financial scandal reportedly descended last Friday on Bank of America offices in Milan. The Italian news agency Ansa said a financial police unit accompanied by Milan prosecutor Eugenio Fusco had searched the Bank of America's Italian headquarters.

A former Bank of America employee has been officially placed under investigation in connection with the allegations of fraud at Parmalat.

The bank played a key role in revealing the affair when it rejected on December 19 the authenticity of a document certifying that Parmalat's Cayman Islands subsidiary, Bonlat Financing Corporation, had 4.8 billion dollars' worth of liquidity as of December 31, 2002.

Meanwhile, global auditing group Grant Thornton International has expelled its Italian member firm, Grant Thornton SpA, from its network. Grant Thornton SpA audited Bonlat Financing Corp., the Cayman Islands company at the centre of the Parmalat scandal.

"We have lost confidence in Grant Thornton SpA," David McDonnell, Grant Thornton International's chief executive said in a statement.

Grant Thornton International was founded in 1924 and operates through a network of 585 offices in 110 countries, structured as a confederation of independent national partnerships, with no legal liability to each other. 

Two directors of the accounting firm Deloitte and Touche were also officially placed under investigation for false reporting and stock market rigging, including Adolfo Mamoli, current head of the Italian auditors' association.

International financial centers of interest now include Singapore and the US state of Delaware, home to two companies officially run by Parmalat's chief switchboard operator Angelo Ugolotti, who swears he had no idea he had been named managing director of up to 30 companies.

Last Thursday, Parmalat administrators denied the existence of 8.4 billion dollars allegedly stashed in US bank accounts that would have gone a long way to filling a "bottomless pit" one investigator described having discovered.

The affair, which may rank at the biggest case of European corporate fraud, concerns companies on six continents and could have consequences for up to 36,000 jobs in 30 countries. 

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