Parmalat poised to seek protection

ITALIAN food giant Parmalat could file for protection against its creditors any time this week after the disclosure of a e4bn (£2.81bn) black hole in its accounts and widespread fraud allegations.

The crisis, dubbed ?Europe's Enron‘, has shaken the country's business community to its foundations and threatens to hit its biggest banks, which loaned money to the dairy foods group.

The scandal also threatens to engulf auditors Grant Thornton and Deloitte. Italian prosecutors took boxes of papers from their offices at the weekend.

Newspaper reports, citing sources close to the company, suggested the deficit could run to e7bn.

Newly-appointed chairman and chief executive Enrico Bondi is meeting industry minister Antonio Marzano, following President Silvio Berlusconi's pledge at the weekend to intervene to save thousands of jobs dependent on the group.

Speculation started to emerge about possible bidders for parts of the business. Nestle denied it was interested, but venture capitalists including Blackstone were said to be looking.