Italy’s top appeals court cancelled jail sentences against prominent bankers Cesare Geronzi and Matteo Arpe on Friday an ordered new trials for the men.
It’s the latest development in the 2003 bankruptcy of Parmalat, a global dairy business with significant operations in Canada.
While the main business went bankrupt, the Canadian operations were able to survive and continue.
The Court of Cassation quashed the sentences handed down by a lower court in 2013 and ruled that the two former bosses at Banca di Roma will have to stand trial for a second time, according to a copy of the sentence seen by Reuters news agency.
In June 2013 the appeals court of Bologna had sentenced Banca di Roma Chairman Geronzi to five years in jail and given a three-year-and-seven-month sentence to Arpe, the former chief executive.
The pair were convicted on charges of fraudulent bankruptcy in connection with the sale of mineral water company Ciappazzi to Parmalat in 2002. Neither has served any time in jail, as the legal process has dragged on for years.
Prosecutors said that, in return for a loan, Banca di Roma put pressure on Parmalat to buy Ciappazzi above the market price to help another of the bank’s clients.
A year later, Parmalat collapsed with a 14 billion-euro (US$17.2 billion) hole in its accounts, wiping out the savings of over 100,000 small investors. Several trials related to the collapse of the dairy group, now owned by France’s Lactalis, are under way.