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Designers admit paying tax police

THE TWO stars of Italian fashion, Gianni Versace and Giorgio Armani, look set to extend their well-known catwalk rivalry into the murky world of Italian corruption.

Called in for questioning last month by Antonio Di Pietro, the best-known of the anti-corruption magistrates, Armani admitted that his company had paid 100m lire ( pounds 40,000) in 1990 to the Guardia di Finanza, the Italian financial police. The magistrates' investigation, which was revealed the week before the autumn fashion shows, has thrown the Italian fashion business into turmoil.

Altogether, some 14 designers are believed to have been questioned over payments totalling L1bn in order to ensure 'friendly' tax inspections of their accounts. These include Mariuccia Mandelli, better known as Krizia, Gianfranco Ferre and Versace himself. Santo Versace, brother of the designer and managing director of the family business, Gianni Versace SpA, made no public statement after his hour-long interview with Mr Di Pietro. In an interview with the Independent on Sunday, however, Mr Versace admitted that his company had also made a payment to the Guardia in 1990 of L250m.

Last Friday it was disclosed that Armani had been called in for a second round of questioning earlier this month. His lawyer, Oreste Dominioni, subsequently revealed that Armani had made a second payment of L300m to the Guardia in 1989. A company spokeswoman pointed out on Friday that this second payment was made not out of company funds, but by Armani personally.

Mr Di Pietro would not comment on the latest revelations, but a spokesman for his office confirmed that the investigation still continues.

Gianni in Wonderland, eview page 4