Running head: Parmalat Corporate Compliance Benchmarking
Corporate Compliance Benchmarking
Parmalat
Corhei Lanier
University of Phoenix
MBA/560 Enterprise Risk
Facilitator: Josephina Cruz-Melendez
Corporate Compliance Benchmarking
Parmalat was one of the most respected and richest companies in Europe. The CEO was considered a great man with superior morals and ethics and held in high regard in surrounding communities. Tanzi’s status only compounded the shock when the giant food company filed for bankruptcy in December of 2003. To date, this was the largest bankruptcy filing in European and American history. The Parmalat scandal exposed the dirty sub-structure of the global financial system, with unforeseeable financial as well as political consequences (Celani, 2004). Revelations surfaced regarding monies in excess of $8-12 billion being unaccounted for or presumed missing. Parmalat then further created suspicion after rumors began to swirl that it would be unable to repay bond issues that were outstanding $187 million (Capital Confirmation, 2008). What were the reason for and when did the financial misconduct begin?
Response to Issue
The story began in 1997, when Parmalat decided to become a "global player" and started a campaign of international acquisitions, especially in North and South America, financed through debt. Parmalat shifted more and more to the high-flying world of derivatives and other speculative enterprises under the direction of CEO and founder Tanzi. These endeavors delivered severe financial losses to the organization. Parmalat’s fiscal shortfalls were being deeply hidden by an elaborate scheme of false financial statements and billing ...