Italian government calls for probe into Vivendi’s control of Telecom Italia

Telecom ItaliaThe Italian government has called for a probe into Vivendi’s increasing control over Telecom Italia (TIM), highlighted by the appointment of the French media group’s CEO Arnaud de Puyfontaine as TIM chairman, the naming of Amos Genish as operations chief and the departure of CEO Flavio Cattaneo.

The Italian government sees TIM as a strategic enterprise and has called for an investigation into whether Vivendi has respected its obligations in terms of transparency and going through the correct procedure in its moves to take effective control of the telco’s management.

Some Italian politicians have called for a separation of TIM’s national network to protect the national interests.

There has been widespread speculation that Italian resistance to the control of TIM by Vivendi has been boosted by the French government’s decision to nationalise STX France, the Saint-Nazaire naval shipyard that was acquired by Italy’s Fincantieri earlier this year, having previously been owned by a South Korean group. However, Italian economy minister Carlo Calenda specifically denied that the two cases were connected.

In the case of companies being designated as of strategic importance, the Italian government must notify any change of control to the board within 10 days under Italian law. The government believes it has the power to intervene if an investigation concludes that there is a serious threat to the public interest related to the proper functioning of the country’s telecom network.

However, some observers have noted that the Italian government may have limited scope to trigger its ‘golden power’ to intervene in the case of a threat to strategic assets, given that Vivendi has not proposed a merger with TIM or made any move that could pose a threat to the integrity of the country’s telecom network.