Telecom Italia Investors Nominate Rival Candidates for Chairman
Published on: 20th Mar 2014
By: Ian Mansfield
Two of Telecom Italia's largest shareholders are likely to clash after they named rival candidates to take over as the debt stricken company's Chairman.
The activist investor Marco Fossati has nominated Vito Gamberale who is currently CEO of investment fund F2i, to take over as Chairman. However, the holding company, Telco which has effective control of Telecom Italia has nominated Giuseppe Recchi, who is currently the chairman of energy company ENI.
The current Chairman of Telecom Italia, Marco Patuano took on the role on a temporary basis following the resignation of his predecessor last year and is due to step down following the shareholder vote next month. There have however been suggestions that he might stay on as a compromise between the two shareholders.
Telco, controlled by Spain's Telefonica can nominate 6 directors to the Telecom Italia board, to sit alongside five independent directors, which gives it effective control over the decision making process for nominating the Chairman.
However, the company is being pushed to let that decision be voted upon by the wider shareholders as well.
Telecom Italia is under pressure to reform its shareholder structure so that Telco loses its control over the company, and while the CEO is said to be supportive, he would probably need an independent Chairman as well to help push through the reforms.
Reform of the shareholder structure is likely to be necessary before the company can refinance its huge debt pile.