Parmalat seeks bankruptcy protection
Italian food giant Parmalat is to seek bankruptcy protection from its creditors, after the firm was found to have a massive multibillion pound hole in its balance sheet.
The firm will seek protection under the so-called Prodi law, akin to the US’ chapter 11 law.
The scandal erupted after Parmalat revealed, contrary to a statement ion September, that the Bank of America was not holding £3 billion of its funds.
Parmalat, which employs around 35,000 workers in 30 countries, is believed to have at least £10 billion missing from its accounts.
The multinational is believed to have haemorrhaged cash though false billings and statements made over many years.
Silvio Berlusconi’s Italian government yesterday announced it would intervene to aid the embattled food company and promised fundamental reforms to the regulatory framework to prevent a repetition of the scandal.
Mr Berlusconi’s own Fininvest media empire is also under investigation on charges of false accounting, including alleged dodgy transactions in the Cayman Islands.
The alleged accounting scandal is one of Europe’s biggest, and is already being compared to Enron, the crisis that sent shockwaves through corporate America.
