There is Something About Parmalat (on Directors and Gatekeepers)

Abstract

This paper focuses on the weaknesses of the regulatory framework exposed by directors' and gatekeepers' behaviour and its contribution to Parmalat's fraud. It will also address how these regulatory gaps might be filled, and wile propose some "solutions." First, we offer a brief description of the industrial, economic and financial structures of Parmalat's group and of the events which forced the company to reveal its financial status. This will help to highlight a number of violations carried out by the directors and those who had the duty of controlling and watching over Parmalat, including the independent directors and the auditors. The atmosphere of laxity amongst the financial analysts, the rating agencies and the banks (as creditors, brokers, dealers, etc.), allowed Callisto Tanzi, the founder and the chairman of the group, and the other managers to perpetrate the fraud whose scope is now well known.

Keywords: Parmalat, directors, indipendent directors, gatekeepers, AUDITING, auditors, rating agencies, financial analysts, Italy, financial frauds, financial scandals, corporate governance, Enron

JEL Classification: G20, G30, K22, N20