ROME -- The head of the Italian unit of the Grant Thornton auditing firm resigned and his partner was suspended after they were detained in the Parmalat scandal on suspicion they aided alleged fraud in the dairy giant's books.
Separately, the judge who issued the arrest warrants for auditors Lorenzo Penca and Maurizio Bianchi and five Parmalat officials and lawyers said the men should remain jailed because there was a risk they might flee, tamper with evidence, or commit other crimes if freed.
The seven were detained Wednesday in Milan, Parma, and Como on suspicion they helped contribute to Parmalat's bankruptcy through false accounting and fraud. They have not been charged.
Chicago-based Grant Thornton International said in a statement issued late Wednesday that its Italian branch, Grant Thornton SpA, had accepted the resignation of Penca as chairman and that Bianchi had been suspended indefinitely. The Italian branch is an independently owned and operated firm of the umbrella organization.
Grant Thornton SpA served as Parmalat's auditor starting in 1990. After it was replaced as the company's main auditor by Deloitte & Touche SpA in 1999, Grant Thornton stayed on to review the books of Bonlat, the Cayman Islands subsidiary at the heart of Parmalat's bankruptcy.
Parmalat, Italy's eighth-largest company and the number three maker of cookies in the United States, has acknowledged a multibillion-dollar hole in its balance sheet and filed for protection from its creditors. The case has been compared to the collapse of the Houston-based energy trader Enron Corp. because both firms used related companies to hide losses.
Parmalat's jailed founder, Calisto Tanzi, has put the size of the hole in its finances at $10 billion, and has also admitted he shifted $620 million from Parmalat's coffers to loss-making travel businesses controlled by his family.
The Italian news agencies Apcom and ANSA reported yesterday that Parmalat's new leadership was considering selling the company's Parma soccer club and other assets. Parmalat has hired a consultant to find a buyer for its Archway Cookies business in North America.
One of the judges overseeing the case, Guido Salvini, has accused Penca and Bianchi of having falsely certified Parmalat's balance sheets and of having suggested the "fictitious operations necessary to achieve the fraudulent aims of the group." He said the two auditors hatched the idea to create Bonlat.
Parmalat was declared insolvent and placed under the supervision of turnaround expert Enzo Bondi when it was revealed that Bonlat didn't have $4.9 billion it had claimed was in a Bank of America Corp. account. The bank said the letter guaranteeing the money was fake.
Bondi replaced Tanzi as Parmalat chief executive and was subsequently appointed by the government to administer the company during bankruptcy proceedings.
Penca and Bianchi were picked up along with four Parmalat officials -- former financial officers Fausto Tonna and Luciano Del Soldato, and employees Gianfranco Bocchi and Claudio Pessina -- as well as outside legal counsel Gianpaolo Zini on a warrant issued by prosecutors in Parma.
In his arrest warrant, Parma Judge Peitro Rogato said the men should remain jailed pending formal indictment because they could flee, tamper with evidence, or commit other crimes, according to excerpts reported by the Apcom news agency.