Calisto Tanzi, the founder of Parmalat, was convicted of a huge bankruptcy in 2003 at the age of 83. Reuters

© Reuters. File photo: Calisto Tanzi, the imprisoned founder and former CEO of failed Italian food giant Parmalat, sits in his garden on September 27, 2004, in his residence near Parma in northern Italy. REUTERS/Daniele La Monaca

Philip Preira

Rome (Reuters)-The businessman Calisto Tanzi died on Saturday at the age of 83. He transformed a small family milk company into a multinational food giant Parmalat. One of the biggest fraudulent bankruptcies in Italy went bankrupt.

His family said that Tanzi died of pneumonia in a hospital in the central Italian city of Parma, where he made a fortune.

Parmalat went bankrupt in 2003, when a vacancy of 14 billion euros was found in its balance sheet, which wiped out the savings of thousands of small investors in the bankruptcy. Bankruptcy also affected the banking, sports, tourism and entertainment sectors.

The company was found to have exaggerated its profits and sales for years, and the bankruptcy triggered lawsuits against dozens of banks worldwide.

Tanzi went through a series of trials with other company executives and famous Italian bankers. He was convicted of market manipulation, fraudulent bankruptcy and other charges, and was sentenced to several times in prison.

Born in the small town of Collecchio in 1938, he took over his grandfather’s local milk company at the age of 22. More than 40 years later, Parmalat Group has approximately 130 factories worldwide, producing milk, yogurt and other foods.

His commercial galaxy also includes a first-class football club, a travel company and a TV network. It also sponsors ski and Formula One racing teams.

The Parmalat crisis broke out in 2003 when the company stated that a 4 billion euro bank account held by a subsidiary in the Cayman Islands did not exist, forcing management to seek bankruptcy protection and triggering criminal fraud investigations.

Despite the company’s investment-grade rating at the time, there have been constant concerns about its failure to explain why it did not use the cash shown on the balance sheet to reduce debt.

The authorities later discovered that Tanz had hidden art treasures by masters such as Pablo Picasso, Claude Monet, and Vincent Van Gogh in a friend’s house. This artwork was auctioned in 2019.

(This story corrects the spelling of the name, Calisto is not Callisto)

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