Italian prosecutors have accused Parmalat's founder of misappropriating €800 million from his family-controlled food group over the past decade, an order by investigating magistrates shows.
The order was issued by two investigating magistrates and cleared the way for police to detain former Parmalat chief Mr Calisto Tanzi (65) on Saturday, judicial sources said.
Mr Tanzi was arrested and is being held in Milan's San Vittore prison while public prosecutors investigate for fraud at Italy's eighth-biggest industrial group.
The authorities yesterday piled further pressure on Mr Tanzi, who built Parmalat into a global food group and a jewel in Italy's industrial crown. He was forced to step down as chairman and chief executive two weeks ago as Parmalat sank into one of Europe's biggest corporate crises.
Police yesterday searched the offices of La Coloniale, the Tanzi family holding company that owns just over half of Parmalat.
Public prosecutors asked a Milan judge to issue a second arrest warrant for Mr Tanzi on suspected fraudulent bankruptcy - a crime that carries a potential penalty of 10 years in jail - and criminal association. An earlier arrest order, issued on Sunday, was for suspected market rigging and false auditing.
Mr Tanzi was among some 20 people, including current and former Parmalat executives and outside auditors, under investigation for suspected crimes, judicial sources said.
Prosecutors said the investigation had uncovered a network of offshore shell companies used to mask losses at Parmalat.
No charges have been brought against Mr Tanzi or anyone else in the corporate crisis, which has forced Parmalat into insolvency.
The order issued on Saturday accused Mr Tanzi, six other current or former Parmalat executives and two outside auditors, of working together "to commit several offences", including false accounting and fraud.
The order said Mr Tanzi had "diverted in his favour and to companies which are not part of the \ group the sum of about €800 million".
It named two former Parmalat chief financial officers and two executives from the Italian unit of US auditor Grant Thornton.
The Milan bourse suspended Parmalat shares, which are virtually worthless, having fallen from a September peak of €3.1 to €0.11.
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