Probe of Parmalat's Cayman Islands subsidiaries now extends to Austria

Wednesday, January 14, 2004

VIENNA, Austria (AFP): The Viennese state prosecutor has begun an investigation into the Austrian subsidiary of Parmalat, which could be at the heart of the alleged fraud at the collapsed Italian dairy giant, legal sources said Tuesday.

Through companies located in tax havens like Luxembourg, Malta and the Isle of Man, the Austrian daily Die Presse said, Parmalat Austria is involved in Bonlat Financing Corporation, a Parmalat company based in the Cayman Islands.

Bonlat was said to have 5 billion dollars in an account at the Bank of America, but the bank's announcement in December that the money did not exist led to Parmalat's collapse.

"We have just opened an investigation into the accounts of Parmalat Austria. It appears that this was one of the European linchpins" of the alleged accounting fraud in the group, Erich Mueller, one of the financial investigators at the prosecuting services, told AFP.

Parmalat Austria, a fully owned subsidiary of Parmalat, holds all the shares in Curcastle Corporation, a company based in the Netherlands Antilles, which in turn controls some 30 foreign affiliates of Parmalat, Die Presse on Tuesday quoted Mueller as saying.

Italian investigators are trying to determine how Parmalat collapsed and are searching for an estimated 2.8 billion dollars reported missing from its accounts.

The network of foreign companies is suspected of being at the centre of the fraud at the dairy giant, according to Die Presse. 

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