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Consob inspect Mediobanca over possible market abuse

Offices raided by market regulator and finance police

28 January, 18:34
Consob inspect Mediobanca over possible market abuse (By Stefania Fumo).

(ANSA) - Milan, January 28 - Italy's finance police and inspectors from market watchdog Consob visited the Milan offices of investment bank Mediobanca on Tuesday to check into two cases of suspected insider trading, Consob said.

"The inspection under way is aimed at checking on potential market abuse that may have been committed in 2013 in operations where Mediobanca acted as intermediary", a Consob spokesperson said.

Italian media reports suggested the inspections centered on the sale of Banca Generali shares and the acquisition of Milano Assicurazioni savings shares last year.

Mediobanca in April helped place 12% of Banca Generali by Assicurazioni Generali while in August it worked on the reverse accelerated bookbuilding of Milano Assicurazioni savings shares by insurer Unipol.

Consob inspectors seized paperwork, emails, and phone recordings from the offices of mid-level managers who worked on the deals.

Italy's biggest publicly traded investment bank, Mediobanca was founded in 1946 to facilitate the post-World War II reconstruction of Italian industry, providing medium to long-term financing for manufacturers.

In the 1990s, it was one the major players in the Italian program of privatization of large state-owned enterprises, with the largest operations concerning Telecom Italia, Enel, Banca di Roma and Banca Nazionale del Lavoro.

It also contributed to foreign programs in the United Kingdom, France, Germany and Spain.

In June last year, shares in the merchant bank took a beating, plunging 9%, when it announced a new business plan that involved spinning off holdings in companies including Telecom Italia and Assicurazioni Generali, Italy's largest insurer, in a bid to return to profit.

In August, the Financial Times newspaper said the closely knit world of Italian big business had begun to unravel after decades of cronyism and capitalism, citing a series of major corporate shake-ups that have begun to transform the way major businesses have operated in Italy since as far back as World War Two.

As an example, it pointed to pressure from investors forcing insurer Generali to unwind cross-shareholdings with Mediobanca that involved everything from newspapers and television to insurance, banking, telecommunications, airports, construction, and hotels.

Mediobanca in September posted losses of 180 million euros in the 2012-2013 fiscal year.

The one-time linchpin of the Italian financial and industrial system posted profits of 81 million euros the preceding year.