Italian justice officials have issued arrest warrants for Silvio Scaglia, the billionaire co-founder of broadband service provider Fastweb and the financial backer of online TV service Babelgum, and other former Fastweb employees and managers as part of a wide-ranging tax and money laundering investigation.
Among the 56 warrants issued was one for Mario Rossetti, an ex-member of the Fastweb board of directors. Stefano Parisi, the current CEO of the company, and two other managers are also under investigation. Four men have reportedly been detained in London and Devon by the UK Serious Organised Crime Agency.
The allegations concern avoidance of VAT payments relating to some providers of paid services between 2005-06 that were using the Fastweb network and those of other Italian telecom providers.
The case centres on a VAT credit in the amount of 38m. Investigators allege that money was laundered via non-existent international telecom phone card and voice services purchases and sales, with the parties only entering into contracts to avoid transferred VAT paid by Fastweb being delivered to the tax authorities. As a result of the investigation, Fastweb has not yet been fully refunded in VAT for the period.
Fastweb said that the allegations had been made known to those involved at the time the issue came to light, and that the amount was not significant in relation to the total VAT receivables accumulated by it since its foundation, which had been regularly analysed and reimbursed by the Italian tax authorities. Fastweb also made it clear that it no longer sold international interconnection services, which the case involves, and that these had always been a small part of its overall business.
FastwebÂs owner Swisscom said it had been aware of the tax investigation at the time of its acquisition of the company in 2007. It said that Swisscom and Fastweb Âhave offered their full cooperation to law enforcement officials in their investigationsÂ.
Sparkle, an internet services division of Telecom Italia, is also under investigation. Fastweb shares fell by about 7.5% yesterday on news of the investigation.
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