S&P office searched in Parmalat investigation

Italian police have searched the Milan offices of rating agency Standard & Poor as part of a multinational probe into how…

Italian police have searched the Milan offices of rating agency Standard & Poor as part of a multinational probe into how food giant Parmalat sold billions of euros in bonds despite its dire finances.

"We welcome the opportunity to cooperate with the Italian authorities," said a spokesman for S&P in London. "We are victims of what appears to be a massive case of fraud and deception," he said.

An S&P spokesman said the ratings agency was not under investigation itself. Rather, the search was aimed at looking for the information received from Parmalat, the source said.

S&P, which kept an investment-grade rating on Parmalat's debt until early December, joined a growing list of financial firms which have been searched in an investigation into an accounting hole of some 10 billion euros at Parmalat.

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The S&P search came a day after tax police took documents from the Milan offices of US investment bank Morgan Stanley and Banca Intesa's Nextra fund management unit.

Those searches were based on a suspicion that the banks may have been aware of the dire state of Parmalat's finances when they handled a 300 million-euro bond, according to a search warrant read to Reuters by a judicial source Wednesday.

Other major banks including Citigroup, Bank of America and Deutsche Bank have also been drawn into the investigation over the past few weeks.

The Bank of America's former head of Italian corporate finance is the only former bank employee among one of at least 25 people formally targeted by investigators in the probe. Those under investigation do not include any current bank employees.

No charges have been filed in the month-old probe into suspected fraud, market rigging and falsified accounts, which has seen the arrest of 11 people, including Parmalat's founder Calisto Tanzi and two former CFOs.