Parmalat auditor faced probe

TOP-LEVEL executives at Grant Thornton International were just months away from carrying out a root-and-branch review of the Italian affiliate at the centre of the Parmalat scandal, it emerged today.

Under the accountant's complex operating structure, it pores over its member firms' 'procedures, policies and practices' every three years and a review in Italy was due in 2004.

Grant Thornton has been at pains to stress how the Italian business is a separate legal entity throughout the Parmalat scandal that has erupted into one of the biggest alleged corporate frauds ever seen in Europe.

But the revelation the Italian arm auditing Parmalat has not been reviewed for more than two years is certain to increase pressure on partners battling to keep hold of their clients. While Chicago-based, much of Grant Thornton's power lies in the UK and chief executive David McDonnell is heading up the investigation into the Parmalat affair.

The accountant has accepted the resignation of Lorenzo Penca, chairman of the Italian affiliate, and suspended his partner Maurizio Bianchi. Both were arrested on Wednesday.

Italian authorities probing Parmalat's collapse a fortnight ago have widened the net in their search for up to e8bn (£5.6bn) of missing money and also are probing the role of Bank of America.