An Italian judge on June 13 ordered four international banks, including Citigroup of the United States, to stand trial in connection with the 2003 collapse of food group Parmalat, the Ansa news agency reported.
Citigroup, Morgan Stanley of the United States, UBS of Switzerland and Germany's Deutsche Bank are accused of stock market manipulation in the meltdown of Parmalat, one of the largest financial scandals in Europe of recent years, according to Ansa. Judge Cesare Tacconi in the northern city of Milan set January 22 as the opening trial date.
The Parmlat scandal erupted in December 2003 with the discovery of a 14-billion-euro (18.5 billion dollars at current exchange rates) shortfall in company accounts.
An investigation revealed that the group, which specialises in dairy products, had been on the brink of collapse for many years but had managed to survive through false accounting practices.
Citigroup said in a statement it had "total confidence in the justice system." "It is convinced that the trial will allow it to prove that it had nothing to do with the infractions of which it is accused and that it has been a victim of the biggest fraudulent bankruptcy in post-war Italian history," it said.
The Parmalat scandal, dubbed "Europe's Enron," stemmed from a web of complicated financial dealings that drove the company into bankruptcy, leaving as many as 135,000 savers in Europe out of pocket.
The company has since been rehabilitated and was re-listed on the Milan stock exchange last October. The most recent move constitutes the latest phase in the first stage of legal proceedings in which the judicial authorities are examining the accusations of stock market manipulation and false financial statements.
The first stage has brought a number of other banks, auditing firms and the former founder and chief executive Calisto Tanzi into the dock. Former company finance director Fausto Tonna and 10 other people were given prison sentences in June 2005 ranging from 10 months to two and half years.
The Parmalat affair was a landmark case owing to the scale of the fraud and because it shook the world of Italian finance, highlighted failings in accounting regulations and besmirched prestigious names in international banking and accounting.
The Parmalat empire employed 36,000 people in 30 countries but now employs only 20,000 following a restructuring under the guidance of government-appointed administrator and now chief executive Enrico Bondi. Parmalat collapsed when millions of dollars worth of assets believed to have been lodged in offshore accounts were found to be inexistent.
A second stage of the Parmalat probe is taking place in Parma and involves 71 people, accused of other financial crimes.