Cayman Islands still probing Parmalat

Tuesday, January 13, 2004

MIAMI, USA: The Cayman Islands said on Monday an investigation into local subsidiaries of fallen Italian food group Parmalat was continuing, and had so far uncovered no evidence of crimes committed in the Caribbean tax haven.

According to a Reuters report, a government spokeswoman said she was not aware that anybody in the Cayman Islands government had to date shared information with Italian magistrates investigating the collapse of Parmalat, Italy's largest food group.

"We are continuing with our investigation. That's ongoing," Bess Bevirgan, spokeswoman for the Financial Secretary's office, told Reuters by telephone from George Town.

"If in fact there is evidence of criminal wrongdoing that occurred here in the Cayman Islands, the attorney general has said that he will not only be prosecuting those individuals under our own laws but of course will be cooperating with Italian officials."

A Cayman-registered Parmalat subsidiary, Bonlat Financing Corp, was at the center of a web of offshore companies that hid or contributed to what Italian magistrates say may be a $12.8 billion hole in the dairy company's accounts.

Parmalat's descent into insolvency began when it announced last month that it had failed to recover around $600 million invested in a Cayman-registered mutual fund, Epicurum. It then acknowledged that $5 billion Bonlat claimed to hold in a Bank of America account was fake.

The Cayman Islands Grand Court on Dec. 24 placed a Parmalat subsidiary, Parmalat Capital Finance Ltd, and two bond-issuing special purpose entities, in provisional liquidation.

Parmalat Capital Finance, itself owned by Parmalat Malta Holdings Ltd, was the parent company of Bonlat and as a result of its winding up, Bonlat has ended up in the hands of Cayman-based liquidators Ernst & Young Restructuring.

Bonlat head Giovanni Bonici, who was based in Venezuela, is among several Parmalat executives arrested in Italy. His lawyers say he just followed orders and signed off on the final page of contracts faxed through to him.

An Italian newspaper, la Repubblica, reported over the weekend the Cayman authorities had informed Italian investigators of eight Cayman companies tied to Parmalat founder Calisto Tanzi, raising expectations that some of the missing assets could be found.

But Bevirgan said she was unsure of the origins of the report.

"I can tell you that basically we're not sharing any information about the investigation," she said. 

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