Ag News -
International Ag News
Thursday, 05 May 2011 13:00
By Colleen Barry
Associated Press Writer
ROME - Parmalat founder Calisto Tanzi was jailed Thursday on a conviction of market rigging related to the stunning collapse of the dairy empire more than seven years ago.
But the 72-year-old Tanzi's lawyer has already maneuvered to gain his freedom on age and health grounds.
Tanzi's lawyer Giampiero Biancolella told The Associated Press that he has filed documents to have Tanzi released under a law that allows convicted criminals over the age of 70 to serve their sentence at home.
"He is in a health clinic in the jail, because he is gravely ill," Biancolella said. He declined to identify Tanzi's illness, citing Italian privacy laws.
He said Tanzi would remain in custody until a decision could be taken on his request, which could be a matter of days.
Police executed a warrant for Tanzi's arrest the day after Italy's highest court upheld Tanzi's conviction, his lawyer and police officials said. The Rome court had reduced the sentence from 10 years to eight years and one month in prison.
Tanzi was driven away from his estate outside of Parma in a sedan with dark windows, preventing photographers and journalists waiting outside from seeing him. Financial police commander Guido Mario Geremia said Tanzi was taken to jail in Parma.
The arrest warrant issued by the Milan tribunal specified that Tanzi has four years and four months left to serve on the sentence, taking into account time served during the investigation and a further three-year reduction because of a general amnesty.
Tanzi has been found guilty at two trials for his role in Parmalat's 2003 collapse under €14 billion (worth about $18 billion at the time), in debt in what remains Europe's biggest ever corporate failure.
On top of the eight-year sentence for market rigging, Tanzi was also sentenced in another more serious case to 18 years in prison by a court in Parma last December for fraudulent bankruptcy and criminal association. That conviction still faces two levels of appeal.
Tanzi has always denied wrongdoing, and blamed banks for the labyrinth of shaky deals that on the one hand helped the once simple dairy business grow into a global empire with operations in more than 30 countries, and on the other, led to its collapse by selling unsound bonds.
But a Milan court last month acquitted four international banks and six managers on criminal charges related to Parmalat's 2003 collapse. The four banks __ Citigroup Inc., Morgan Stanley, Deutsche Bank AG and Bank of America Corp. — always denied wrongdoing and maintained they were defrauded by Parmalat.
Many who lost money in Parmalat's demise were ordinary Italians who bought the fraudulent bonds. Through deals struck with the banks without the acknowledgment of wrongdoing, many of the bondholders have recovered up to 80 percent of their investments.
The €14 billion hole in Parmalat's accounts remain an enduring mystery. Tanzi has always denied having a secret account where the lost investments are stashed.
Italian tax police, however, seized works by Van Gogh, Picasso, Cezanne and other artists in a crackdown on assets hidden by Tanzi at his estate in December 2009. Authorities estimated the 19 masterpieces stashed away in attics and basements were valued at about €100 million ($150 million).
Parmalat emerged from bankruptcy closer to its origins as a dairy company, shed of the travel and water companies that were symbols of the company's rapid expansion. The French dairy company Lactalis has launched a full takeover bid for Parmalat, after facing opposition from the Italian government to its efforts to gain de facto control of the board with a share just under the level that would require regulatory scrutiny.
Parmalat did not issue a statement in reaction to Tanzi's arrest. And one of the lawyers for defrauded bondholders, Carlo Federico Grosso, said the proceedings were as expected.
Vanessa Gera contributed to this report.