UPDATE 1-Italian bankers lose appeal vs jail in Parmalat scandal

Fri Jun 7, 2013 11:25am EDT

* Geronzi given five years, Arpe 3 years and 7 months

* Case linked to 2003 collapse of dairy group

* Arpe lawyers to appeal to highest court

* Geronzi will not go to jail for age (Releads, adds Arpe lawyers, background)

By Valentina Accardo

BOLOGNA, Italy, June 7 (Reuters) - Two prominent Italian bankers lost their appeals on Friday against jail sentences in a fraud case linked to the collapse of Italian dairy group Parmalat in 2003.

A court in Bologna sentenced former Banca di Roma chairman Cesare Geronzi to five years in jail and gave a three-year-and-seven-month sentence to Matteo Arpe, the lender's former chief executive.

The pair, who can still appeal to Italy's highest court, were convicted on charges relating to fraudulent bankruptcy in the sale in 2002 of mineral water company Ciappazzi to Parmalat.

"We are totally surprised by the sentence," Arpe's lawyers Sergio Spagnolo and Mauro Carelli said in a statement after the case, which confirmed the jail terms handed down by a lower court.

They said their client, currently at the helm of Banca Profilo and private equity group Sator, would appeal.

Parmalat collapsed in 2003 when a 14 billion euro hole was uncovered in its balance sheet, wiping out the savings of thousands of small shareholders.

Prosecutors say Geronzi, a former power broker with close ties to Italy's financial and political elite, put pressure on Parmalat executives to overpay Ciappazzi to help another Banca di Roma client in return for a loan.

Because of his age, the 78 year-old will not go to jail but could be placed under house arrest.

Arpe, also a top executive at Banca di Roma at the time, was accused with Geronzi of contributing to Parmalat's fraudulent bankruptcy. He would risk going to jail if the verdict was confirmed by the top appeals court.

Banca di Roma changed its name to Capitalia in 2002 before being taken over by Italy's biggest bank UniCredit in 2007. (Additional reporting and writing by Stephen Jewkes; Editing by Lisa Jucca and Mark Trevelyan)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.