[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Friday, 9 January, 2004, 17:21 GMT
Ninth arrest in Parmalat probe
Giovanni Bonici, head of Parmalat Venezuela
Police will ask Mr Bonici about offshore financial operations
The former head of Parmalat Venezuela has become the ninth person to be arrested in the probe into the scandal hit food giant.

Giovanni Bonici was jailed in Parma after flying to Italy from Venezuela.

Mr Bonici's lawyer Antonino Tuccari added that he would be questioned by police on Saturday.

He will be quizzed about his time as head of Bonlat, a Cayman Islands unit, which is suspected of siphoning funds out of Parmalat.

In a letter sent to reporters in Caracas, Mr Bonici said he was temporarily leaving his post to "confront the annoying situation related to irregularities committed overseas by officials in the transnational company".

He denied any wrongdoing on his part.

Scandal spreads

The news came hours after Italian police raided the Milan offices of Bank of America as part of their continuing investigations into fraud allegations surrounding the company.

Investigators in Italy and beyond are trying to piece together the background to the collapse of Parmalat, until recently one of Europe's most admired food companies.

The company's founder, Calisto Tanzi, is currently in jail, accused of having falsified the company's accounts for many years.

No one has yet been charged over Parmalat's missing money. The food and dairy group filed for bankruptcy protection in December 2003 after declaring at least $10bn missing from its accounts.

Police issued a list of half a dozen top Parmalat executives, including Mr Bonici, whom they wanted to hold for questioning.

The scandal has broadened in recent days, however, with some 25 individuals now named as suspects.

Banks in the spotlight

The scandal is now spreading to Parmalat's auditors and advisers as prosecutors and financial regulators demand to know how the complex web of fraud that siphoned off money and hid debts was put together.

Parmalat's collapse began when Bank of America denied any knowledge of a Caymans bank account that Parmalat's books said contained more than $3.9bn euros.

Italian police on Thursday named Luca Sala, an ex-BoA executive who last year joined Parmalat as a consultant, as someone they wished to question.

The roles of BoA and Citigroup as Parmalat's financial advisers are also under scrutiny.

Mr Bonici can expect close questioning over events at Caymans-based Bonlat, a financial subsidiary which issued documents for the mystery bank account at the heart of the scandal.

Two partners at the local arm of accountants Deloitte & Touche were reportedly questioned by investigators on Thursday.

Accountancy firm Grant Thornton International has sought to protect itself from the scandal by severing ties with its Italian affiliate, which audited some of Parmalat's businesses.

Staying alive

Parmalat's management, meanwhile, is struggling to salvage as much as possible from the insolvent firm.

Parmalat's core business, which is anchored on dairy products, where it leads the Italian market, is reckoned to be fairly sound.

But management is believed likely to have to break up the firm in order to stabilise its core finances.

The administration process, which now covers the entire firm, allows it considerable protection from creditors.

The BBC's Brian Barron
"Parma is shell-shocked by the fall of its patriarch"

The BBC is not responsible for the content of external internet sites


News Front Page | Africa | Americas | Asia-Pacific | Europe | Middle East | South Asia
UK | Business | Entertainment | Science/Nature | Technology | Health
Have Your Say | In Pictures | Week at a Glance | Country Profiles | In Depth | Programmes
Americas Africa Europe Middle East South Asia Asia Pacific