Liquidator holding Caymans unit
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GEORGE TOWN, Cayman Islands (Reuters) -- The Cayman Islands company at the center of the collapse of Italy's top food group, Parmalat, is now under the control of local liquidators Ernst & Young, a lawyer says.
Andrew Jones of the Caymans law firm Maples and Calder, which provided registered offices for a string of Parmalat units, said Tuesday that Bonlat Financing Corp. fell into the hands of Ernst & Young as a result of the liquidation of other Parmalat companies.
"Bonlat is now under the control of the provisional liquidators, Ernst & Young," Jones told Reuters in George Town.
Parmalat dropped a bombshell two weeks ago when it said that nearly four billion euros ($5 billion) Bonlat claimed to hold at the Bank of America did not exist. Italian magistrates say the claim was based on forged documents.
Parmalat's founder, Calisto Tanzi, has since been detained for questioning and remains in jail pending formal charges related to fraud. Parmalat filed for bankruptcy protection last week. (Full story)
Bonlat was a wholly-owned subsidiary of another Caymans-registered company, Parmalat Capital Finance Ltd, which was placed in provisional liquidation by the Caymans Grand Court on Christmas Eve.
Two other Parmalat entities, Dairy Holdings Ltd and Food Holdings Ltd, which issued bonds backed by Parmalat, were also placed in provisional liquidation at the request of creditors.
Ernst & Young Restructuring in the Caribbean tax haven was appointed to wind up all three.
Jones said Parmalat Capital Finance Ltd was a wholly-owned subsidiary of a Parmalat company registered in Malta. He was unaware of any legal moves that relationship might produce.
He also said he was unaware of any cash withdrawals that Parmalat executives may have made from another Caymans entity registered with his law firm, the obscure Epicurum mutual fund that triggered Parmalat's crisis when the parent company failed to withdraw some 500 million euros from it.
Jones said all correspondence for Epicurum would have been forwarded to the New York offices of Italian lawyer Gian Paolo Zini, who had close ties to Parmalat founder Calisto Tanzi.
In a written explanation of the functions of the two off-balance sheet financing companies, Food Holdings and Dairy Holdings, Maples and Calder said they had issued notes worth a collective $315.5 million.
The notes were guaranteed by Parmalat SpA.
"The company's ability to repay the notes is dependent upon
the sale of Parmalat shares by the company under the terms of an agreement between the company and Parmalat Capital Finance Ltd," the law firm said.
"The performance by Parmalat Capital Finance Ltd of its obligations to the company under such agreement has been guaranteed by Parmalat SpA."
It was unclear where the money raised by the bond issues ended up.
Meanwhile, accounting firm Grant Thornton International is standing by its Italian unit, two of whose executives have been accused by Italian magistrates of playing a key role in the unfolding Parmalat scandal.
The firm said Tuesday that initial results from an internal inquiry it had launched had shown that the unit had cooperated fully with authorities from the outset.
It also said it had not been notified by Italian prosecutors that its Italian arm or partners were the target of an investigation, or that they had been accused of wrongdoing.
The statement by the accounting firm's umbrella organization comes after Italian magistrates probing the scandal at the Italian food group accused two executives of Grant Thornton's Italian unit of helping set up off-shore units to hide balance sheet irregularities.
A spokeswoman for Grant Thornton's international network acknowledged reports containing the allegations against the Italian arm's executives, but said the unit itself had not received any such notice from the authorities.
According to legal writs obtained by Reuters, however, Milan and Parma magistrates say the accounting firm's Italian unit, Grant Thornton SpA, helped "devise and organise" Bonlat Financing Corporation, the Cayman Islands-based unit that claimed to have a 3.95 billion euros ($4.95 billion) bank account that didn't exist.
Copyright 2003
Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
