Grant Thornton International faces a £5bn claim from food giant Parmalat which accuses the firm of an ‘active role’ in ‘looting’ the company when its founder and his chief financial officer attempted to conceal losses. Co-defendant Deloitte, which took over the auditing of Parmalat's main operation in 1999, has already settled by paying £76m.
According to Financial Mail, Parmalat administrator Enrico Bondi states in legal documents that the accountancy firm had an 'active role' in 'looting' the company. 'Grant Thornton and Parmalat insiders hid losses and diverted funds to themselves,' the writ states.
Grant Thornton's former Italian partners, Lorenzo Penca and Maurizio Bianchi, are accused of being key players in the fraud. The Italian arm is no longer part of the Grant Thornton 'global alliance' of partnerships and Grant Thiornton International has claimed it can not be held responsible for the actions of its Italian arm.
Parmalat alleges fake credit and loan notes were written and a web of fake front companies created – many based in Grant Thornton offices around the world and in some cases with its accountants acting as directors.
Further reading:
Professional indemnity: regulation -ready to take risks
Comments