Parmalat prosecutors request trial

Prosecutors yesterday called on a judge to put the founder of Parmalat, 28 other executives and three financial institutions on trial for the Italian dairy group's multi-billion-euro accounting scandal.

A judicial source said the list included Calisto Tanzi, who built Parmalat into a top Italian multinational before its near collapse under €14 billion of debt in December in one of the world's biggest corporate meltdowns.

The prosecutors also named the Italian affiliates of Bank of America and of auditors Deloitte & Touche, and auditor Grant Thornton's former Italian office, the source told Reuters.

"We do not believe the facts support this charge against Bank of America. We will defend ourselves vigorously," the number-three US bank said in a statement.

Three former Bank of America employees were among the 29 individuals on the prosecutors' list, the source said.

The accused were the same as those named by the prosecutors in March when they unsuccessfully sought a fast-track trial.

Deloitte & Touche in Italy declined to comment. It has previously said it met auditing standards when it signed off on Parmalat's books. Grant Thornton's former unit in Italy, Italaudit, has denied wrongdoing. The scandal shook financial and political establishments in Italy and beyond, as Parmalat's business empire spanned 30 countries from Brazil to China and the United States and its bonds were widely held on Wall Street as well as in Italy.

An estimated 80,000 Italian investors held Parmalat bonds which are now virtually worthless, and the group's plunge into insolvency also triggered a spate of lawsuits by US and other international funds seeking to recover their money.

Italy's best-known turnaround expert Enrico Bondi this week is putting the finishing touches to his plan to rescue Parmalat including a debt-for-equity swap for bondholders.

Yesterday's request for an ordinary trial must now be considered by a Milan judge who, after a closed-door hearing, will decide whether formally to indict the accused and order them to stand trial, or throw out the request.

All 29 executives and the three companies face the charge of market-rigging while some face possible trial for false auditing and regulatory obstruction too, the source said.

The most serious charge is market-rigging, or conspiring to issue false information to investors about Parmalat's finances. It is punishable by up to 10 years in jail.