Telecom Italia's CEO is throwing his weight behind plans that could see
Telefonica's influence over the Italian firm sharply reduced.
At the moment, a holding company, Telco has effective control over Telecom
Italia as despite owning just 22.4% of the shares, can appoint four-fifths of
the directors. Telefonica is the majority shareholder in Telco.
The "four-fifths" board rule has been in place since 1997, when Telecom
Italia was privatized by the government.
An activist shareholder, Marco Fossati, who owns 5 percent to Telecom Italia
is pushing for the shareholding structure to be normalised so that minority
shareholders are not penalised by the current system. In this, he is reported to
have the backing of Telecom Italia's newish CEO, Marco Patuano.
Directors gathering in Milan will start reviewing a motion by investors led
by Marco Fossati to strip Telco's power to name four-fifths of board members, Bloomberg
News reported, citing unnamed sources.
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