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Ex-CFO of Parmalat Blames the Boss

''Parmalat SpA had a president with extraordinary powers, and that was Calisto Tanzi,'' the former finance chief tells an Italian court.
Stephen Taub, | US
May 9, 2006

Fausto Tonna, once the chief financial officer of Parmalat Finanziaria SpA, testified Tuesday that former chief executive officer Calisto Tanzi explicitly told other executives to fudge financial reports to mask losses at the food and dairy giant in 1994, the Associated Press reported.

"The fact of hiding the losses was Calisto Tanzi's decision," said Tonna, according to the AP, which quoted Italian news agency Ansa. "It was certainly also known to people on the board of directors." The need to adjust earnings began around 1994 or 1995, he added, "when the situation with our activities in South America became disastrous."

Tanzi and 15 other individuals are charged with market rigging, providing false accounting, and misleading Italy's stock-market regulator, according to the AP.

"Calisto Tanzi made decisions about the financial operations and related strategies," Tonna testified, according to the AP, which cited Italian news agency Apcom. "I implemented them and moved them ahead. Parmalat SpA had a president with extraordinary powers, and that was Calisto Tanzi."

The former finance chief was one of 11 individuals — including two other ex-CFOs — who were sentenced last year for their roles in the Parmalat scandal. Following a plea bargain, Tonna was sentenced to two and a half years in prison.