Citi awarded $364.2 million as damages in Parmalat case

21 October 2008

Mumbai: Citigroup Inc has won $364.2 million as damages from Parmalat SpA in a case related to the Italian dairy company's 2003 collapse. The New Jersey state court convicted the Parmalat officials of committing fraud and negligent misrepresentation and conversion, amounting to theft.

Citigroup, however, claimed it was a victim of Parmalat's fraud and filed a countersuit.

The court, which has been hearing the case since May, awarded Citi $364.2 million for each of the fraud and misrepresentation charges and $210.2 million for the conversion charge, but capped total damages at $364.2 million.

Parmalat went bankrupt after faking documents of a 3.95 billion-euro ($5.34 billion) account at Bank of America Corporation. Parmalat later emerged from bankruptcy and returned to the stock market two years later, in 2005, under chief executive Enrico Bondi.

The jury ruled six-to-one in Citigroup's favour, after it found that the bank had no role in the collapse of the Italian dairy company.

Parmalat's new management filed the case against Citigroup seeking up to $2.2 billion in damages, for aiding corrupt executives at the Italian dairy company to loot it before it collapsed in 2003.