Deloitte warned in 2000 over Parmalat

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The Independent Online

Deloitte, the accounting firm that audited the books of Parmalat, raised questions about the accounting used at the Italian food group's subsidiaries three and a half years before its spectacular collapse.

According to documents unearthed by Bloomberg, Deloitte qualified the accounts of a Luxembourg holding company in the Parmalat empire as early as May 2000.

However, the qualification in the accounts of Parmalat Soparfi - relating to a lack of information to back up asset valuations given by directors - was not referred to in Parmalat's group accounts, which were also audited by Deloitte.

Fausto Tonna, Parmalat's former finance director, who was arrested on New Year's Eve, was a director of Soparfi. Three other senior executives from Parmalat also served on Soparfi's board.

The reservations stated by the Deloitte auditors in Luxembourg were also noted when Soparfi raised €553m (£375m) in a bond issue to help fund the rest of the group in 2002. These bonds were convertible into Parmalat shares.

The problems related to the valuations given to Soparfi's holding in two other units, Parmalat Paraguay and Parmalat Food Industries South Africa. Deloitte claims the concerns expressed in Luxembourg were not relevant when its Italian office came to audit the whole group because those auditors were using lower valuations for the two operations in question.

A Deloitte spokeswoman could not confirm that the Luxembourg auditors had even discussed the problem with their Italian counterparts.

The auditing of Parmalat has come under the spotlight after it emerged that Grant Thornton, which audited a Cayman Islands-based subsidiary of Parmalat, accepted there was €3.95bn of cash and securities in the business on the evidence of a forged fax.