Counting the cost of Europe's ENRON

Italian magistrates are I seeking to question Santander Central Hispano, Spain's largest bank, on the whereabouts of some $250m of Parmalat funds deposited at one of the bank's subsidiaries in the Cayman Islands.

However, SCH said yesterday it had not yet been contacted by the Italian judiciary. Magistrates have not suggested that SCH was involved in any wrongdoing.
But SCH is expected to take part in the effort to help trace. more than €8bn ~($l0bn) missing from Parmalat's accounts.
SCH confirmed that Banespa, its Brazilian bank, had done business with Parmalat in Brazil, including the underwriting of equity issues. Bankers said Parmalat Brazil had placed $250m with SCH in the Cayman Islands following a $500m bond issue. SCH said the deposit was collateral for a loan to Parmalat Brazil.
SCH declined to quantify its exposure to Parmalat, indicating merely that its loans to Parmalat Brazil and its parent company in Italy followed the bank's "conservative risk criteria".
BBVA, Spain's second largest bank, said it had no exposure to Parmalat, although it added it might be affected as a result of its 14.9 per cent stake in Italy's Banca Nazionale del Lavoro.
Clesa, a medium-sized Spanish dairy company controlled by Parmalat, has sought to reassure creditors and customers that it has not been affected. Clesa said it had no financial dealings with Parmalat in Italy.
Bankers believe Parmalat transferred the funds out of its Santander account in the Cayman Islands in 2001. SCH is understood to be checking its electronic transfer records.
"At the time, Parmalat was a good corporate client with excellent international bond ratings. There was no hint of anything suspicious," said one banker familiar with the operations.
Meanwhile, Dutch regulators yesterday said they had launched an inquiry into the affairs of Parmalat subsidiaries in the Netherlands.
The Authority for Financial Markets, the Dutch securities supervisor, said the probe sought to ascertain whether companies "either in or working through the Netherlands" had been conducting their affairs according to Dutch regulations.