ABSTRACT
Parmalat was established in 1961, by a then 22-year-old Calisto Tanzi, who built upon an inherited family-run delicatessen. In 1965 Parmalat began to sell milk with vitamin C, and marketed milk that came from herds free of tuberculosis. The corporate monitoring structure of Italian-listed companies required the presence of two gatekeepers: the board of statutory auditors and the external auditing firm. In this framework, Parmalat Finanziaria was composed of three members as the minimum legally required, but the original Parmalat board comprised largely executive directors, and most of the non-executive directors were close to the Tanzi family. The signs that all was not well at Parmalat were backed up by the company's loss of three chief financial officers (CFOs) in one year: Fausto Tonna, Alberto Ferraris and Luciano del Soldato. Tonna helped create some of the financial vehicles to hide the losses of Parmalat, and Tanzi blamed him for being behind the company's financial ruin.
