(Reuters) - The founder of Parmalat SpA was sentenced to 18 years in jail for his role in the Italian food giant’s 2003 collapse in Europe’s biggest corporate bankruptcy.
Following are some facts about the Parmalat scandal:
* Parmalat collapsed at the end of 2003 with a 14 billion euros ($18.6 billion) hole in its accounts. The crisis erupted in December 2003, when it said a 4 billion euro bank account held by a Cayman Islands unit did not exist, forcing management to seek bankruptcy protection and triggering a criminal fraud probe.
* Despite the company’s investment-grade credit rating, concerns had swirled for months over Parmalat’s failure to explain why it did not use cash shown on its balance sheet to cut debt.
* There have been two main trials into Parmalat’s collapse, one in Italy’s financial capital Milan and the other in Parma, close to the group’s headquarters.
In Milan, Tanzi has been sentenced to 10 years in prison for market rigging and obstructing market regulators. He is appealing against the ruling.
In Parma, a trial began in March 2008 and focuses on allegations of fraudulent bankruptcy and criminal conspiracy within Parmalat.
A total of 56 people were originally charged but most sought plea bargains or accelerated trials or had charges dropped.
* A streamlined version of the dairy group, stripped of loss-making foreign units, relisted on Milan’s bourse on October 6, 2005. The shares opened at 3.15 euros, giving it a value of some 5 billion euros -- or almost three times its capitalization before the collapse -- as investors bet on revenue from damages suits and on potential takeover bids.
* Parmalat’s collapse sparked litigation worldwide against dozens of banks, including Bank of America Corp and Citigroup Inc, by current Parmalat management and by investors.
* Parmalat has recouped more than 2 billion euros from settlements with banks including Morgan Stanley and the former Merrill Lynch, now part of Bank of America.
(Compiled by Antonella Ciancio; Editing by David Holmes)
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