Parmalat manager given suspended fine

Parmalat became a major global player in the dairy food sector thanks to its pioneering of long-life milk in the 1960s Keystone

The Federal Criminal Court in Bellinzona has found a 63-year-old Italian guilty of money laundering in connection with the 2003 collapse of the Parmalat dairy empire.

This content was published on November 19, 2012 minutes and agencies

The former manager of an Italian holding company was sentenced to a suspended fine of 180 days at SFr110 ($117) a day.

The majority of the offences were time-barred, however, the judge said on Monday. Of 32 offences listed in relation to money laundering, only three could be used when assessing the penalties.

In addition to money laundering, the man was also convicted of encouraging the falsification of documents. He apparently made his wife put her name on a bank account in Switzerland but, in the opinion of the court, this account was only ever used by him.

In April, an Italian appeal court shaved two months from an 18-year jail sentence for the founder of Parmalat for spearheading the €14 billion (SFr16.8 billion) collapse of his dairy products empire in a scandal dubbed "Europe's Enron".

The sentence is one of the harshest ever issued in Italy, where jail terms for white-collar crimes are rare.

The maker of long-life milk and fruit juices, now owned by France's Lactalis, buckled in December 2003 under a massive accounting hole that wiped out the savings of more than 100,000 small investors in its highly-rated corporate bonds.

The 74-year-old billionaire who was Parmalat's chief executive at the time was found guilty on charges of fraudulent bankruptcy and criminal conspiracy over what was then Europe's biggest corporate bankruptcy.

Criminal fraud probe

Italy-based Parmalat became a major global player in the dairy food sector thanks to its pioneering of long-life milk in the 1960s. It owns several well-known global brands such as Santal fruit juices.

Parmalat's accounting scandal erupted at the end of 2003 when it revealed that a Cayman Island bank account supposedly holding $4 billion did not exist.

Management sought bankruptcy protection, and prosecutors launched a criminal fraud probe.

Despite its investment-grade credit rating, concerns had swirled in the run-up to Parmalat's collapse over its failure to explain why it did not use the abundant cash shown on its balance sheet to slash debt.

Parmalat was restructured and relisted on the Milan bourse in 2005. It has recouped more than €2 billion from settlements with banks including US investment banks Morgan Stanley and Merrill Lynch, now part of Bank of America.

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