Word: milan
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...failure made all the more dramatic by the fact that the company had established itself as a recognized global brand. In the past year three teams of forensic accountants have combed through the company's books, and dozens of executives have made detailed confessions to magistrates in Parma and Milan. Using documents obtained by TIME, it's possible to piece together the inside story of how the company that wanted to be the Coca-Cola of milk went sour...
...years Tanzi hid his company's difficulties by expanding. Following a disastrous foray into television in the 1980s, he staved off bankruptcy by engineering a reverse merger with a dormant holding company listed on the Milan stock exchange and followed up with a big capital increase. That enabled Parmalat to go public in 1990 and plug some of the gaps in its accounts. As early as 1993, according to evidence given to magistrates in Parma, Parmalat allegedly began to play fast and loose with its balance sheet. Starting in 1992, the group began buying up dairy and other companies...
...company seemed so attractive that foreign banks, with Citibank at the head of the line, were clamoring to get a piece of the business. Ferraris, who worked at Citibank in Milan for seven years before joining Parmalat in 1997 as an executive in Canada and Australia, remembers making regular sales calls on CFO Tonna. "There was big competition for Parmalat business," Ferraris recalls. "You needed to come up with a product that really interested them." On Ferraris' watch, Citibank scored two coups, first setting up a securitization program, then advising Parmalat on its acquisition of Beatrice Foods in Canada...
Traveling in the Gulfstream corporate jet with Lewis was Luca Sala, then a managing director of Bank of America in Milan who worked on some of the bank's transactions for Parmalat. Less than a month later, the bank fired him for allegedly fiddling his expenses. He immediately began work for Parmalat. Ferraris says he needed Sala's help to understand a $400 million private-placement setup for Parmalat...
...equity infusion, a charge the bank denies. The refinancing was even more controversial because Sala, it turns out, had an ownership interest in the company formed to handle it. Bank of America says it didn't know that at the time. Sala has been indicted along with two other Milan-based Bank of America bankers. One of them, Antonio Luzi, told magistrates how Sala had given him a total of $900,000 on three separate occasions. Bank of America says that, as Parmalat's second biggest creditor, it is one of the parties most damaged by the fraud--and that...