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Citigroup, Morgan Stanley, Others Indicted in Parmalat Case

AP
Wednesday, 13 Jun 2007 | 9:24 AM ET

Four international banks were indicted in Milan Wednesday on charges related to the 2003 failure of the Parmalat dairy empire, Europe's largest corporate bankruptcy.

Judge Cesare Tacconi issued the indictments against Citigroup, UBS , Morgan Stanley , Deutsche Bank -- along with 13 managers of those lenders -- for failure to take measures that would have prevented the crimes that led to the company's failure.

The case is one of several trying to assign responsibility for the stunning collapse of the dairy company under $18 billion of debt.

In the dairy company's hometown of Parma, a court has been hearing preliminary evidence for nearly a year in proceedings to decide charges against more than 60 former executives, financial advisers and bankers.

That case is considered the most important because it alleges fraudulent bankruptcy and, in some cases, criminal association. It carries the highest penalties: up to 15 years in prison.

In another Milan trial, Parmalat founder Calisto Tanzi and 15 others, including external auditors, face charges of market-rigging, providing false accounting information and misleading Italy's stock market regulator. They could be sentenced to up to five years in jail.

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