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New operations in probe into scandal-hit MPS

Shares in troubled Siena bank jump more than 20% in trading

05 March, 19:03
New operations in probe into scandal-hit MPS (ANSA) - Milan, March 5 - Shares in troubled Italian bank Monte dei Paschi di Siena (MPS) jumped dramatically in trading Wednesday, closing more than 20% higher amid unusually high volumes.

Analysts suggested interest in MPS stock was heightened by reports the foundation that owns about one third of its shares has sold a stake to a foreign investment fund, Bloomberg reported.

Trading was frozen at one point during the day due to volatility in the stock, which closed at 0.22 euro cents.

Fondazione Monte dei Paschi di Siena wants to sell some shares to raise funds and is said to be in advanced talks with foreign investors.

Meanwhile, during the day finance police expanded their investigation into what is now believed to be a 90-million-euro fraud at MPS, including new searches in several cities including Siena, Rome, and Milan, authorities said. The latest searches are part of a broader probe targeting alleged members of the so-called "5% gang" - a name given to ex-bank managers suspected of taking 5% payoffs on banking operations under a previous management.

Investigators believe the fraud occurred between January and October 2013.

Prosecutors say they hope to eventually bring charges of aggravated criminal conspiracy aimed at defrauding the Sienese bank. The case involves funds transferred to offshore accounts, trusts and companies, and investigators are reaching out as far as San Marino, Switzerland, Great Britain and Singapore as they search for suspicious international transactions.

The Siena prosecutor's office has placed 11 former MPS managers and financial brokers under investigation in the case, including Gianluca Baldassarri, former chief of finance for MPS.

They are also probing Baldassarri's former deputy, Alessandro Toccafondi, the former head of the MPS London office Matteo Pontone, and former MPS manager Antonio Pantalena.

Italy's third-largest bank was thrown into crisis in January 2013 when it emerged that a shady series of derivative and structured-finance deals produced losses of 720 million euros.

Meanwhile, the investigating judge of the court of Siena announced the file has been closed into the suicide of David Rossi, the bank's communication manager who threw himself from a window in March 2013.