How Parmalat Went Sour

Here's the skinny on Europe's enormous financial scandal

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January 12, 2004 at 5:00 AM UTC

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In the wake of the financial scandals at Enron, WorldCom (MCWEQ ), and Tyco International (TYC ), European chief executives smugly insisted no such fraud could ever occur in Europe. They spoke too soon. The accounting calamity at Italian dairy-foods giant Parmalat has prosecutors scrambling to find out what happened to $8.5 billion to $12 billion in vanished assets. That sum makes Parmalat one of the largest financial frauds in history. Some questions and answers about the collapse of what was once considered a jewel of Italian capitalism:

What triggered the financial crisis?