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Libya's UniCredit stake sparks row

Regulator seeks clarification on holdings

Gulf News

Milan: Libya's central bank on Monday sought to deflect criticism from Italian politicians and a top shareholder about its stake-building in UniCredit.

The accumulation by the central bank of a 4.98 per cent stake — the third biggest in UniCredit — has drawn fire from other shareholders worried about a reduction in their influence.

A financial source said on Friday the Libyan Investment Authority, Tripoli's sovereign wealth fund, had raised its holding to 2.59 per cent.

Italian market regulator Consob and the Bank of Italy have requested clarification on the stakes and whether the two investors are independent of each other. Bank rules bar a shareholder from having a voting stake of more than 5 per cent.

UniCredit Chief Executive Alessandro Profumo has been criticised for not informing top managers about the Libyan stake-building.

In an e-mailed statement, the Central Bank of Libya (CBL) said its is an "independent institution".

Board matters

"All rules and regulations related to the CBL operations, financial and administrative matters are decided by its board. The majority of the CBL board members are independent and are not from the public sector."

The central bank added it was "extremely satisfied" with its relationship with Italian regulators and with its UniCredit holding, which met its criteria for long-term investments.

Libya's holdings are expected to be discussed at a meeting of UniCredit's strategic committee on Thursday, a source close to the issue told Reuters.

"There is definitely a demand for clarification. The shareholders are disgruntled, that's for sure," said the source, who spoke on condition of anonymity.

Capital increases

UniCredit's top shareholder foundations, which have political ties to Italian regions, hold about 11 per cent. They were hit by two capital increases during the financial crisis as Profumo sought to bolster capital and analysts say the Libyan stake-holding could reduce their influence.

In an unusual display of concern, Andrea Comba, the chairman of the Cassa di Risparmio di Torino (CRT) Foundation, said it would be necessary to ascertain whether Profumo was acting in shareholders' interests. CRT has 3.32 per cent of UniCredit.

"We have been historically one of the most faithful to Profumo's line, even at the cost of serious sacrifices on the part of the CRT Foundation," he said in an interview with the Corriere della Sera newspaper yesterday.

"We must verify in [next spring's] shareholder assembly, which we will attend, if his actions have been in line with our interests or not."

A UniCredit spokesman declined to comment.

Verona Mayor Flavio Tosi, a leader of the federalist Northern League which is a partner in the centre-right government, repeated comments that Libya was planning a UniCredit takeover, according to the Affari Italiani website.

Tosi criticised Profumo over Libya's stakes and said: "He who makes a mistake pays for it."

Verona has board members in the Cariverona foundation, which has 4.64 per cent of UniCredit.

Elio Lannuti, a centre-left opposition member of the anti-corruption Italy of Values party on parliament's finance committee, called for the CEO to resign.

The Libyan ambassador to Italy told Reuters on Friday Libya was satisfied with its current stake and had no plans for a takeover.

Shares in UniCredit were off 0.16 per cent at 1.92 euros at 1057 GMT yesterday as the STOXX Europe 600 banking index was 0.28 per cent higher.