Italian Banks Considering Legal Action Over Parmalat Collapse

by Ulrika Lomas, for LawAndTax-News.com, Brussels

14 January 2004

Italian banks are said to be considering legal action in order to recover losses caused by false accounting and flawed auditing at Italian dairy giant, Parmalat.

According to a report in the Saturday edition of Italian newspaper, Corriere della Sera, CEO of Unicredito Italiano, Alessandro Profumo revealed that several financial institutions in Italy are looking into the possibility of legal action.

However, Mr Profumo explained that the challenges may not necessarily be issued against the company itself, which is hoping to restructure under the newly amended Italian bankruptcy laws.

According to Corriere della Sera, Parmalat's special administrator, Enrico Bondi may himself be planning to launch a legal action against the group's auditors.

Under current Italian law, a firm's principal auditors need only verify 51% of a group's overall assets and liabilities, with the remaining 49% being the responsibility of the individual auditors of subsidiaries.

However, it emerged recently that in the wake of Parmalat's collapse, EU Internal Market Commissioner, Frits Bolkestein is considering reforms to the rules governing auditors, which would seek to make group auditors responsible for all aspects of companies' accounts.

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