Capitalia chief to stand trial over Parmalat collapse

26 July 2007

Veteran Italian banker Cesare Geronzi has been ordered to stand trial on charges relating to the fraudulent bankruptcy of diary group Parmalat.

The chairman of both Mediobanca and Capitalia, along with seven others, will face charges of involvement in fraudulent bankruptcy over the sale of mineral water company Ciappazzi to Parmalat.

Matteo Arpe, the former-chief executive officer of Capitalia., is charged with failing to prevent fraud committed by others.

Lawyers representing Mr Gernozi told the Financial Times: "It's a surprising development. Capitalia was the object of a fraud that involved the national and international banking system. Just like all the other bankers, those of Capitalia could not have foreseen the Parmalat group's breakdown."

The case centres on accusations that Banca di Roma, later known as Capitalia, put pressure on Parmalat's board to buy Ciappazzi for more than its market value in order to assist another of the bank's clients and insisted on this condition prior to approving the loan to Parmalat subsidiary Parmatour.

Should Mr Gernozi be convicted, he could face a sentence of up to ten years

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