The Italian Enron?

It’s amazing what you can find in the financial press. The kicker is that they pulled off a multi-billion dollar scam with a $100 desktop scanner.

CBS – MarketWatch – Billions of dollars gone missing. Tumbling shares, bumbling bankers and accountants and regulators.

Sounds familiar, doesn’t it?

Is the affair surrounding Italian dairy group Parmalat Finanziaria really, as some in London are saying, “Europe’s Enron?”

[..] at the heart of the scandal, from what has been unearthed so far at least, was a simple forgery. The company used a scanner to make false Bank of America documents and passed them to the auditors of Parmalat’s offshore operations, Grant Thornton, prosecutors told Reuters on Tuesday.

Comparing Parmalat to Enron is like comparing a convenience-store holdup to looting Fort Knox. They’re both stealing, but one requires sophistication. The other is just sad and pathetic.

Why a company that saw 7.6 billion euros in revenue last year, with a reasonably solid business plan, felt the need to falsify documents is still unknown. Why ratings agencies, accountants, banks, securities regulators and yes, the media, continually miss securities fraud, as they had with Royal Ahold, and Enron, needs to be asked.

But the Italian business world is not — how can this be said politely? — known for above-reproach dealings and clear-as-water transparency.

[..] the MIB 30 (The Italian equivalent of the Dow Jones Industrial Average) of December 23 stands above the levels of just over a month ago, before the scandal rocked the company.

In other words, investors have said, it’s business as usual in Italy. Nothing has changed.

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  1. Director Mitch December 23, 2003
  2. oldcatman December 23, 2003
  3. Enterprise System Spectator December 23, 2003