Word: parmalat
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Dates: during 2000-2009
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...with a pseudonym. Most of it came from the refinancing of a 1999 Brazilian deal, under which Bank of America raised $300 million from U.S. investors to acquire a stake in Parmalat's Brazilian group. News of the transaction sent Parmalat stock soaring 17% in a single day, as investors were cheered by the idea that Americans were buying into the company. The transaction is now a central element of Bondi's case against the bank; he says it made a loan look like an equity infusion, a charge the bank denies. The refinancing was even more controversial: Sala admitted...
...network, but which collapsed after three years. To stave off bankruptcy, Tanzi engineered a so-called reverse merger, under which it sold itself to a dormant holding company already listed on the Milan stock exchange. The combined firm then raised about €150 million from outside investors. That enabled Parmalat to go public in 1990, and plug some of the gaps in its accounts; at the time it had a market value of around €300 million. But as early as 1993, Parmalat allegedly began to invent financial transactions to pad its balance sheet. Investigators in Milan and Parma agree...
...Parmalat expanded globally in the '90s, so did its network of bankers and financial advisers. Ferraris was one of them. Before joining Parmalat in 1997 as an executive in Canada and Australia, he worked for seven years at Citigroup in Milan - and made regular sales calls on Tonna. "There was big competition" for Parmalat business, Ferraris says. At the time, U.S., British and other European investment banks were piling into Italy trying to grab local business, and Tonna played hard to get. "You needed to come up with a product that really interested them," Ferraris recalls. For Citigroup, Ferraris scored...
...Traveling in the Gulfstream corporate jet with Lewis was Luca Sala, a managing director of Bank of America in Milan who worked closely on some of the bank's transactions for Parmalat. Less than a month later, the bank fired him for allegedly fiddling his expenses, so he immediately took a new job - with Parmalat. Ferraris says he needed Sala's help to understand a complex $400 million in financing provided by big institutional investors in the U.S. Sala, 40, has since confessed to magistrates that he received more than €20 million in commissions from Parmalat for helping...
What struck and surprises me is the simplicity [of the Parmalat fraud]. It was almost banal...