Judge orders two Parmalat auditors to face trial in January

MILAN (AFP) - Italy's justice system began hearings into the Parmalat scandal which rocked the world's leading financial institutions, ruined tens of thousands of small savers and pushed Italian and EU regulators into imposing tougher rules on high finance.
Two former auditors at the Italian food giant will become the first executives to stand trial for their alleged role in Europe's biggest financial scandal.
In a first ruling of a preliminary court which began hearings Tuesday, Milan judge Cesare Tacconi ordered Maurizio Bianchi and Lorenzo Penca to stand trial in late January on market rigging charges -- spreading false information about shares to influence the price.
The two executives were attached to Parmalat's former auditors Grant Thornton.
The judge, who adjourned the case until October 29, must yet decide whether a further 27 individuals -- including Parmalat founder Calisto Tanzi -- and three financial institutions must face trial on market rigging, false corporate communications and obstruction.
Tacconi set a series of seven further dates for hearings, including five in November and December 3.
Lawyers for Bianchi and Penca had requested an accelerated trial, which will skip preliminary hearings which could take years under Italy's notoriously slow justice system. In return, any eventual sentence will be reduced by a third.
Tanzi, the 65-year-old former chairman and founder of Parmalat, was absent from the court on medical grounds, despite his release from a lengthy house arrest last week.
Tanzi, the key suspect in the 14.5-billion-euro (17.8-billion-dollar) collapse, has been in and out of hospital since shortly after his arrest on December 27 last year, the day Parmalat was declared insolvent after the discovery of a multi-billion euro hole in its accounts.
Dozens of small savers and shareholders of the more than 130,000 affected by the collapse attended the hearing in Milan. Many are represented by Italian consumer associations Altroconsumo and Adusbef.
Altroconsumo said it was acting as a plaintiff "to safeguard savers' right to have a transparent and fair financial market. Crimes allegedly committed by defendants have damaged this right."
"We hope that those who are guilty will be judged," said lawyer Gaetano Pecorella, representing a group of bondholders.
One 36-year-old bondholder, who identified himself as Davide from Treviso, carried a banner with a Parmalat logo bearing the inscription "Italy's shame". He said he had lost about 50,000 euros (62,000 dollars) in the collapse of one of Italy's prime companies, with more than 32,000 employees in 30 countries at the time of its demise.
Tens of thousands of out-of-pocket shareholders and bondholders seeking restitution have attached themselves to the criminal proceedings as civil parties.
Three financial institutions have also been named as accused in the case, the Bank of America and the Italian affiliates of auditors Deloitte and Touche and Grant Thornton.
Meanwhile, Bank of America lawyer Riccardo Olivo said the bank would formally ask the court to cancel prosecutors' request for a trial, the Radiocor economic news agency reported.
Olivo said the bank has not been formally notified of the closure of the investigation, a step normally taken before this hearing.
Most of Parmalat's former executives were detained and questioned in connection with the collapse, which has been dubbed "Europe's Enron".
Apart from Tanzi, other leading lights at the company facing charges are Tanzi's son Stefano, and former financial officers Fausto Tonna and Luciano Del Soldato.
Meanwhile, Parmalat's government-appointed administrator Enrico Bondi is pursuing a swathe of financial institutions through a series of civil suits designed to recover some of the 14.5 billion euros to repay Parmalat creditors.
Chief among his targets are Citigroup -- the world's largest financial services group -- Bank of America, auditors Deloitte Touche Tomhatsu and Grant Thornton in the United States, and UBS and Deutche Bank in Italy.
Bondi alleges that these financial institutions hid the true state of Parmalat's finances from investors while encouraging them to to buy its bonds.