Shareholders in Banca Popolare di
Milano (BPM) rejected governance changes proposed by management
Monday, triggering a sell-off in shares of the Italian bank.
Market regulator Consob moved quickly to ban short-selling
in the bank stock through Tuesday as financial markets digested
the decision coming from an extraordinary shareholders meeting.
Chief Executive Officer Giuseppe Castagna had proposed
giving institutional investors an increased say after the annual
general meeting on Saturday failed to approve his proposed
changes by the required two-thirds majority.
The governance changes would reduce the say of employee and
union shareholders by giving an equal voice to institutional
investors in the cooperative bank.
Proposed changes in governance at the bank had been
strongly promoted by the Bank of Italy, after BPM announced it
would launch a 500-million-euro share sale expected to begin on
May 5 to boost its capital and attract new investors ahead of an
asset review by the European Central Bank.
The ECB is reviewing the books of banks in numerous
countries including 15 institutions in Italy to ascertain their
soundness.
Shares in BPM bank fell by as much as 9.5% during Monday's
trading.
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