Monte dei Paschi CEO under investigation for alleged market manipulation
Luigi Lovaglio served with notice by Milan prosecutors in probe linked to Mediobanca takeover
The chief executive of Italian bank Banca Monte dei Paschi di Siena is under investigation for alleged market manipulation and obstruction of supervisory functions in connection with its takeover of rival Mediobanca.
MPS said on Thursday that it had received a search warrant and its chief executive Luigi Lovaglio had been served a “notice of investigation by Milan’s prosecutor’s office in his capacity as chief executive officer”.
Shares in MPS ended the day more than 4 per cent lower in Milan.
Milanese prosecutors are also investigating MPS and its top shareholders Delfin and Francesco Gaetano Caltagirone for alleged market manipulation and obstruction of regulatory functions, according to three people familiar with the details of the investigation.
Delfin and Caltagirone were also top shareholders in Mediobanca.
The investigation was first reported by Italian newspaper Corriere della Sera.
Delfin declined to comment. Caltagirone did not immediately reply to a request for comment.
MPS said it was “confident it can provide all the necessary information to clarify the correctness of its actions and expresses its full trust in the competent authorities, with whom it confirms its full co-operation”.
People close to the investigation said prosecutors alleged the €13.5bn takeover of Mediobanca, launched in January, was pre-agreed between MPS and both banks’ billionaire shareholders. The investors have been under investigation for months, according to the people.
The takeover of Mediobanca by its smaller rival, in which Italy was the single largest shareholder, shocked markets and analysts this year.
It came only two months after Delfin and Caltagirone, both longtime shareholders in Mediobanca and insurer Generali, had also taken stakes in MPS. Mediobanca is the top investor in Generali with a 13 per cent stake.
Mediobanca’s former chief executive Alberto Nagel fought for months to fend off the takeover bid. In March the Milanese lender lodged a complaint with the European Central Bank, alleging there was concealed concerted action between Delfin and Caltagirone.
However, the ECB approved the takeover, which completed in September after MPS added a €750mn cash sweetener to its offer. The shareholder acceptance rate was well above initial expectations, leading to Nagel’s resignation.
Milanese prosecutors now allege that the actions of Delfin, Caltagirone and MPS, including their initial investment in MPS last year, were co-ordinated but that the investors failed to communicate it to regulators.