CITIGROUP, the world’s biggest financial services company, has come out fighting against the $10 billion (£5.5 billion) suit filed by the administrator of Parmalat, the collapsed Italian food company.

The American bank, which acted as an adviser to Parmalat, said that the claims made by Enrico Bondi, Parmalat’s administrator, were “baseless”. Citigroup is also the collapsed company’s biggest creditor.

The bank yesterday insisted that Signor Bondi had “presented no credible evidence that substantiates his allegations of wrong doing”.

Citigroup claimed that the administrator’s main allegation — that the bank knew of Parmalat’s insolvency before its collapse — is “completely untrue and entirely unsubstantiated”.

The bank pointed out that the claim does not “explain Citigroup’s alleged willingness to become Parmalat’s biggest creditor while, allegedly, in full knowledge of its insolvent condition.”

Citigroup also categorically denies the administrator’s allegation that various offshore transactions carried out with Parmalat were in fact disguised loans.

Citigroup claims that the offshore transactions allowed Parmalat access to low-cost funding, while allowing Citigroup to benefit from tax credits.

William Mills, chief executive officer of the company’s global corporate and investment banking group for Europe, the Middle East and Africa yesterday said: “Citigroup itself was a major victim of the Parmalat fraud. ”

Late last week, accounting firm Grant Thornton International and Bank of America, which have also been sued by Parmalat for their alleged roles in the dairy group’s insolvency, filed motions in a New York court seeking to file a counter-suit against Parmalat.

Signor Bondi this year filed a $10 billion (£5.5 billion) lawsuit in the US against its former auditors, Grant Thornton and Deloitte & Touche.

The administrator also filed separate $10 billion lawsuits against debt arrangers Citigroup and Bank of America.

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