Parmalat Founder Blames Pride, CFO

The former CEO was convinced that his "genius" ideas would counterbalance what he described as insufficient finance management skills.

Calisto Tanzi, the founder and former chief executive officer of Parmalat, said his limited financial acumen played a part in his company’s demise, according to the Associated Press, citing an article published this past weekend in Italian publication La Repubblica.

Tanzi said he was aware of his group’s financial difficulties but not of the real situation of its balance sheet, according to the wire service report, which quoted excerpts from a handwritten memo from Tanzi to Parmalat prosecutors investigating the scandal.

Perhaps pride played a part, too. According to the article, Tanzi said he was convinced that his “genius” ideas would counterbalance what he described as insufficient finance management skills.

Like other top executives who have been accused of wrongdoing, however, Tanzi also pointed the finger at his former chief financial officer. “I entrusted the management to others, in particular to [former CFO Fausto] Tonna,” he reportedly wrote. Tanzi added that although he knew of “Parmalat’s very grave debt, I was not aware of the real situation…Tonna was telling me that from a financial point of view there was no problem because the banks knew the situation and the industrial plan.”

The prior day, according to wire-service reports, Tanzi apologized to investors who suffered losses in the scandal and pledged to help prosecutors reconstruct the case, the wire service noted.

“I take full responsibility for what happened,” reported La Repubblica, citing Tanzi’s memo, “but I must also stress that — as I was going after my dream of creating a big industrial and commercial enterprise — I have under-evaluated [the importance of] my scarce knowledge of financial management.”

Previously Tanzi had denied responsibility, but according to Dow Jones, his turnabout doesn’t seem to be connected to fear of prison. Late last year a judicial source told the wire service that Tanzi is unlikely to be sentenced to time behind bars because of his age, 70, and his poor health.

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