10 Dec 2010

Parmalat founder sentenced to prison for fraud

8:35 am on 10 December 2010

The founder of Italian food conglomerate Parmalat has been sentenced to 18 years in prison for his role in a fraud at the company.

Ex-chief executive Calisto Tanzi, 72, was convicted of criminal association and fraudulent bankruptcy.

Parmalat went bankrupt in 2003, owing 14 billion euros. Some 135,000 investors lost their savings.

A court has also ordered former Parmalat executives to pay the firm 2 billion euros and reimburse defrauded investors.

The judge also sentenced the former financial director Fausto Tonna to 14 years in prison. Tanzi's brother Giovanni was sentenced to 10 years, seven months.

At the time of its collapse, Parmalat was employing about 36,000 people in 30 countries.

The company was relisted on the Milan stock exchange in 2005 - without its foreign divisions.