Lawsuit for Parmalat, advisers

AMERICAN based shareholders in Parmalat have launched a $1bn (£553m) class-action lawsuit against two former executives and the scandal-hit food giant's financial, auditing and legal advisers.

The move came as former Parmalat finance director Fausto Tonna blamed founder Calisto Tanzi for what is shaping up to be Europe's biggest corporate scandal.

'I didn't initiate anything,' Tonna told investigators. 'I only carried out orders.'

Parmalat filed for bankruptcy protection on 19 December, less than a week after it said a $4.9bn account purportedly held at Bank of America did not exist. Estimates of the alleged fraud have ballooned as high as $16bn.

The lawsuit filed in New York alleges investors were defrauded by Tanzi and Tonna, along with Parmalat's main banker Citigroup, external auditors Grant Thornton and Deloitte Touche Tohmatsu and law firm Zini & Associates.

The complaint was lodged by law firm Milberg Weiss Bershad Hynes & Lerach, which is also involved in shareholder litigation over US energy trader Enron.

It claims a web of offshore shell companies, manipulative financing deals and forged papers enabled Parmalat to overstate assets and understate liabilities.

The suit was filed on behalf of the Southern Alaska Carpenters' Pension Fund and seeks class-action status for investors who purchased Parmalat securities between 5 January 1999 and 29 December 2003.