Grant Thornton CEO sees damage from Parmalat

The global name of accountancy firm Grant Thornton International had been damaged by the Parmalat accounting scandal, Chief Executive David McDonnell was quoted by the Financial Times newspaper on Tuesday as saying.

Its Italian affiliate, Grant Thornton SpA, audited certain Parmalat Finanziaria SpA units, including a Cayman Islands unit at the centre of the multi-billion-euro scandal.

“It would be a fool who did not agree there has been some damage done to the reputation of the international name by this debacle,” McDonnell was quoted by the FT as saying.

“Who could argue that? I would not sound credible if I did that. Clearly it is not positive news. It is negative news.”

He said the damage would be “relatively short in nature.”

The chairman and senior partner of the Italian unit have been arrested. Like other top accounting firms, Grant Thornton member firms worldwide are separate legal entities and say they do not share liability stemming from the actions of one unit.

The crisis at Parmalat erupted just over two weeks ago when its new managers revealed an initial four-billion-euro gap in its accounts, forcing it to seek protection from its creditors.

Prosecutors have accused Parmalat founder Fausto Tonna of helping construct a web of offshore holding companies with fictitious assets. Investigators believe the accounting hole could exceed 10 billion euros ($12.7 billion). ($1=.7889 Euro)

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