Italian prosecutors yesterday questioned Mr Calisto Tanzi after police detained the founder and former chief executive of Parmalat in connection with an alleged multi-billion euro fraud at the food and dairy group.
Four prosecutors heading the investigation into alleged false accounting and market-rigging at Parmalat interviewed Mr Tanzi at San Vittore prison in Milan, where he was taken on Saturday.
Mr Tanzi, 65, is at the centre of an inquiry into one of Europe's biggest corporate scandals, which involved the creation of fictitious assets in offshore front companies to conceal debts.
The scandal is not only damaging the image of corporate Italy but raising questions about the role of regulators, auditors, banks and executives in overseeing businesses that operate sophisticated global financial structures.
Judicial sources said prosecutors in Milan intended to ask a judge today for permission to convert Mr Tanzi's provisional detention into a formal arrest. Like other Parmalat executives under investigation, he has not been charged with a crime.
Police picked up Mr Tanzi on Saturday after he returned from a trip abroad and met his lawyer.
People close to the investigation said he had spent recent days compiling an account of events at Parmalat, and he hoped to make it public this week.
"This is a difficult time for him," Mr Fabio Belloni, Mr Tanzi's lawyer, told reporters.
Another lawyer representing, Mr Tanzi, said yesterday that no money had been stolen but there had been non-existent assets on its balance sheet.
"No money disappeared, (there were) just non-existent assets," Mr Michele Ributti said after Mr Tanzi was questioned by investigating magistrates.
Two Milan magistrates, who spoke to reporters after questioning Mr Tanzi, said they would seek a judge's order to convert Tanzi's provisional detention, which can last no more than 48 hours, into a formal arrest.
One of the magistrates, Mr Carlo Nocerino, said Mr Tanzi's health, which has been the subject of speculation, seemed good.
Judicial sources said the prosecutors would present the request today to a judge, who would decide by this evening whether Mr Tanzi should be formally arrested.
A court in Parma, where Mr Tanzi turned his family business into one of Italy's best-known companies, declared on Saturday that Parmalat was insolvent.
The ruling allows Parmalat to remain in operation and pay employees and suppliers under the control of Mr Enrico Bondi, who was appointed commissioner of the company last Wednesday by the government.
Mr Bondi has at least six months to draft a restructuring plan for Parmalat.
"There will be no rush to dispose of assets. We are just starting to understand the real cash-generating capacity of the assets," one adviser said. - (Financial Times Service/Reuters)
