Deutsche Bank settles £6m Parmalat affair case

Deutsche Bank has signed an out of court settlement with a former banker caught up in the Parmalat affair.

Carlo Arosio, a managing director of the bank based in London, was one of a number of Deutsche bankers accused of derivative fraud in Italy in relation to the collapse of the dairy conglomerate in 2003.

Mr Arosio had filed a writ against the bank in the High Court, demanding he be paid £6.6m, after being made redundant from the bank late last year. But the Telegraph understands that the writ no longer stands, as the result of an out-of-court settlement at the start of this month. No details of the settlement have been made public, but it is thought unlikely Mr Arosio received the full amount he was demanding in the claim.

Mr Arosio began working for the bank in October 1998, initially in London, before being seconded to its Milan office from 2010. In 2003, he and a number of Deutsche bankers became embroiled in the Parmalat case, which saw the dairy conglomerate collapse under €14bn (£11.6bn) of debt.

He and nine bankers were in 2012 convicted by a Milan judge of hiding profits from the sale of interest-rate swaps. He was given a suspended jail sentence and banned from dealing with government entities for a year.

Mr Arosio argued that in 2006 the bank agreed to indemnify him against expenses connected with the investigation into Parmalat. Letters cited stated that if he was to be made redundant, he would be paid the standard package, but the discretionary element would be twice the value of a year’s pay. This, he says, was £3,313,859.46 and he claimed he was entitled to this amount under each of the letters, making £6,642,568.92.

A Deutsche Bank spokesman confirmed the settlement.

UPDATE

All the bankers referred to in this report were cleared of any wrongdoing by the Milan Court of Appeal on 7 March 2014. We are happy to make this clear and apologise for this omission from our report.