WEST PALM BEACH, FL (HEDGECO.NET) – Italian investigators looking into the Parmalat scandal are closely examining the role which Citigroup officials may have played in the Parmalat financial crisis.Some of the questions being examined by investigators includes how Calisto Tanzi, the owner and founder of Parmalat was able to scheme away hundreds of millions of dollars from company funds.
The Parmalat crisis resulted when Italian investigators discovered that millions of company funds were not accounted for. [Hedgeco.net Previous story] Parmalat officials claimed that about US$1 billion of its investments were tied up in a Cayman Islands domiciled Epicurum hedge fund.
The Citigroup connection with the case comes through Eureka Securitization Inc, a commercial Credit Securitization firm owned by Citigroup.Eureka Securitization had purchased some assets from Parmalat, subsequently Citigroup realized that there were some invoicing irregularities from deals with Parmalat, and decided to notify Italian investigators about it. Citigroup may also be considering suing Parmalat over potential fraud involving some invoices.
There is also another twist in this complicated case, at the center of this quagmire in a company called Carital based in Dutch Antilles. The puzzle Parmalat investigators are trying to solve is to find out who owns Carital. Carital is said to be the main shareholder in over 55 milk distribution companies owned by Tanzi, Parmalat�s owner. It is believed that Tanzi and or his relatives own Carital, but so far investigators have not linked them yet to the said company.
Citibank, along with Bank of America and Deutsche Bank are among the banks being probed for any role they may have had in the disappearance of hundreds of millions of dollars from Parmalat’s books. None of these banks have been accused of any specific violation, it should be stated. Citigroup may also be suing Parmalat over the invoicing fraud relating to Eureka Securities, but it is unclear at the moment who would be suing who and when.
Meanwhile Dutch regulators said that the US$5 billion in bonds issued by Parmalat�s Dutch unit violated Dutch laws, and that Dutch securities supervisor does not have any records of such transaction. This complicated international scandal, continues to baffle investigators who are bent on explaining how such scheme could have continued for so many years and not discovered.
Paul Oranika
Editor-in-Chief
HedgeCo.Net
editor@hedgeco.net
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