This is Bob Doughty with the VOA Special English EconomicsReport.

In December, the Italian food company Parmalat admitted thatalmost five-thousand-million dollars the company said it had in abank did not exist. The value of the company's debt investments,called bonds, fell by about seventy-five percent. Within one week,the company sought protection from its creditors. The company hadfailed and was bankrupt.

Company Chairman Calisto Tanzi was arrested in December. So far,eleven people have been arrested and at least twenty-five people areunder investigation.

Mister Tanzi has admitted to taking at least six-hundred-milliondollars from Parmalat. Investigators are now looking for at leastseven-thousand-million dollars that the company claimed it had.

Parmalat's creditors appointed Enrico Bondi as administrator ofthe company while it is in bankruptcy. The Italian Parliament hasgiven Mister Bondi wide powers to administer the company. TheFinancial Times newspaper says Mister Bondi can cancel deals made byParmalat up to two year ago.

A lawyer for a group of Parmalat's creditors said some of themissing money may have been placed in a Bank of America office inNew York City. Carlo Zauli says private investigators have linkedthe money at the bank to Mister Tanzi. But the Bank of America saysit has investigated and found no record of so much money.

Fausto Tonna, a financial director and advisor at the company hasalso been arrested. So has his wife. One of Parmalat's financialofficials, Gianfranco Bocchi, has admitted to creating falsedocuments. One claimed that a Parmalat company, called BonlatFinancing, had five-thousand-million dollars. The company was in theCayman Islands.

Bonlat is similar to other companies created by Parmalat in theNetherlands. These companies exist only on paper. They do not sellanything. They serve to create the appearance of business activity.

Yet, these companies permitted Parmalat to raise huge amounts ofmoney. Parmalat sold bonds thirty five times betweennineteen-ninety-five and two-thousand-three. These sales alsocreated a huge amount of debt.

Parmalat is based in Parma, Italy. It has more thanthirty-six-thousand employees and one-hundred-thirty-nine productioncenters all over the world.

This VOA Special English Economics Report was written by MarioRitter. This is Bob Doughty.