Not so much dilemma as catastrophe for the Italian dairy group, now dubbed the Enron of Europe. Parmalat's founder Calisto Tanzi and finance director Fausto Tonna were arrested in December, along with seven other Parmalat executives, accountants and advisers on suspicion of false accounting, fraud and market manipulation. The globe-spanning firm went into a nosedive when it was shown to have forged Bank of America letterheads detailing a Eu3.95 billion account with Cayman Island-based subsidiary Bonlat. It was soon declared bankrupt. Two sets of magistrates, one in Milan, the other in hometown Parma, are investigating Parmalat's bewildering tangle of transactions and offshore companies in an attempt to track down the Eu14.5 billion found missing when it imploded. According to Tonna, Parmalat haemorrhaged Eu350 million to Eu450 million a year from the mid-90s to 2001, and that's just the tip of it. Those close to the Parmalat management believe the cover-up went back 30 years. Tanzi's children were also arrested and questioned over Eu500 million in cash diverted into family assets.
On his arrest, Tanzi said of the offshore accounts into which he had allegedly diverted Parmalat assets: 'I don't know them, I don't know anything about these companies.' He has since admitted the accusation and confessed to falsification of accounts 'without knowing the arrangements that were entrusted to his officials', according to a judicial source. Tanzi's family have kept schtum but Tonna has been more communicative. Not known for his good manners, he told prying journalists: 'I wish you and your families a slow and painful death.'
THE STRAIGHT TALK
Parmalat is now in the hands of government administrator Enrico Bondi, who has been asked to formulate a rescue plan for redeemable fragments of the business. Fourteen US SEC investigators have joined Italian magistrates examining the case, such are the global ramifications of Parmalat's downfall.
At the time of writing, prosecutors are preparing to press the first charges against people involved in the firm's collapse, 26 of whom have been named.
A separate corporate fraud investigation is expected to take much longer.
One senior Italian banker told BusinessWeek: 'The whole thing is rotten.
Everyone is running for cover.'
For Parmalat, Tanzi and Tonna, the show is over. For those remaining, there's no use crying over spilt milk.