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Parmalat Fraud Hearing Begins in Italy

A court in the northern Italian city of Parma launched proceedings Monday aimed at proving fraud in the multi billion dollar collapse of the Parmalat food company -Europe's largest corporate failure.

Sixty-four former executives, financial advisers and bankers face possible fraud charges in the 2003 collapse of Italian food giant Parmalat.

The trial in the company's hometown of Parma focuses on alleged fraud, false accounting, embezzlement and a host of other charges. The main figures in the company's collapse are former CEO Calisto Tanzi and his right-hand man, the chief financial officer, Fausto Tonna. Neither was present in court on Monday.

Tanzi founded Parmalat in 1961, building it up into one of the world's top 25 dairy food groups. But he is accused to stealing more than $1 billion and trying to cover it up with fraudulent earning reports.

The company went under due to false accounting that resulted in estimated debts of nearly $20 billion. Tanzi has blamed banks for leading the dairy company to its downfall, claiming they were the ones pushing the sales of the bonds.

Banks have denied any wrongdoing. But many believe they continued selling bad bonds to small private investors while being fully aware of the company's situation.

Tanzi's lawyer Gianpiero Biancolella said that unfortunately the collapse of Parmalat led to many serious and unpleasant situations and that the former CEO had asked investors to forgive him. He added that what happened at Pamalat should never have happened.

Some 33,000 small investors who lost money in the Parmalat collapse Monday joined the prosecution as civil complainants. They potentially will seek billions of dollars in damages.

Consumer lawyer Giovanni Franchi said small investors were the first to arrive in court because they want their money back. They hope they will get all the money they invested returned.