Milk-and-cookies tycoon Calisto Tanzi – the disgraced founder and former head of Italian food giant Parmalat – was behind bars yesterday in connection with a multibillion-dollar corporate scandal.
The silver-haired, media-shy Tanzi, 65, was picked up on a Milan street just hours after his company was declared insolvent.
Police said he would spend the night in the lockup before investigators meet with him later today.
Prosecutors suspect Tanzi is a key player in a wide-reaching fraud case involving the company’s managers, auditors, and banks.
His company, which produces milk products as well as the Archway and Mother’s cookie brands, showed a $12.5 billion hole in its accounts, investigators said.
The unfolding scandal threatened billions of dollars of investments by shareholders.
Tanzi stepped down as CEO this month just days before the crisis erupted and was reported to have fled the country.
But he was in custody last night, suspected of committing fraudulent bankruptcy and criminal association. He faces 10 years in prison.
Tanzi’s fall from grace was the stuff of classic opera.
He took over a dairy plant in 1961 and built it into a global brand that became one of the jewels of Italian industry – until things began to sour.
Prosecutors have named about 20 people in the fraud probe, including current and former employees of the group as well as outside auditors.
Investigators are also looking into Parmalat’s complicated financial dealings with Citigroup and Merrill Lynch.
Probers said people questioned last week described a complex web of offshore shell companies hiding losses for more than a decade.
Parmalat U.S. auditor Grant Thornton last week rejected allegations it had falsified accounts at a company unit at the heart of the investigation.
Tanzi dropped out of college at 21 to join the family business – a delicatessen near Parma’s train station – when his father fell ill.
He soon started a milk business, and by 1973 Parmalat had become a national industry leader, diversifying and pushing abroad.With Post Wire Services