A former Bank of America executive who later became a consultant to the Italian dairy giant Parmalat has been arrested in connection with the multinational's financial meltdown, Italian media reported on Tuesday.

This was the first arrest related to Parmalat's fraudulent bankruptcy since February of last year.

Sala was arrested at his home in Forte dei Marmi, on the Tuscan coast, and was taken to prison in Parma, an Italian northern city.

He was officially placed under investigation in March 2004, after magistrates investigating Parmalat's collapse seized some four million euro in cash and bonds in account he had access to.

This June he was ordered to stand trial in Milan on charges of stock market manipulation, accounting fraud and hindering the operations of the stock market watchdog Consob.

The probe into Parmalat's collapse is being handled by Milan's prosecutors for crimes related to the stock market and in Parma's prosecutors, for all other crimes including fraudulent bankruptcy and embezzlement.

Sala will stand trial in Milan along with Parmalat founder and ex-CEO Calisto Tanzi and 14 others, as well as three financial institutions: the Italian affiliate of Bank of America, and Parmalat's two former auditing firms, Grant Thornton and Deloitte and Touche.

Parmalat financially imploded in December 2003 after it emerged that 4 billion euros it supposedly held in an offshore account did not in fact exist.

The account had been used to balance the group's books and further investigation led to the discovery that a whopping 14.5- billion-euro hole existed in the group's accounts.

Source: Xinhua