UPDATE 3-Ex-Finmeccanica manager arrested in graft probe

Tue Oct 23, 2012 4:08pm EDT

Related Topics

* Group's ex-commercial director arrested in Naples

* Probe concerning contracts in Panama, Brazil

* Finmeccanica denies paying ex-director for activities in Panama

* Former Industry Minister Scajola being probed (Adds Finmeccanica statement on Pozzessere, closing share price)

By Antonella Ciancio and Emilio Parodi

MILAN, Oct 23 (Reuters) - A former manager of Finmeccanica SpA has been arrested over allegations of international corruption, his lawyer said on Tuesday, in the latest move in a broader probe facing Europe's third-biggest defence group.

Former commercial manager Paolo Pozzessere, currently an adviser to the Italian group, was arrested as part of an investigation into supply contracts with Panama and, according to investigative sources, Brazil.

"It is the first arrest in the Panama affair," Pozzessere's lawyer, Carlo Marchisio, told Reuters.

In a statement later on Tuesday, Finmeccanica said the group had not paid any compensation for brokering three contracts in Panama worth 180 million euros ($233 million).

Pozzessere, who resigned as commercial director of Finmeccanica in September 2011, had not been notified of an investigation, Finmeccanica said.

The probe covers figures connected to Finmeccanica as well as the extent of links between government officials and the state-controlled company.

EX-MINISTER PROBED

Former industry minister Claudio Scajola is also under investigation.

"I found out I was being investigated only now," Scajola told Italian television on Tuesday.

Scajola denied any wrongdoing from the time he was a minister in the government of former prime minister Silvio Berlusconi.

Police searched Finmeccanica offices in Naples and Rome on Tuesday in relation to the arrest of Pozzessere, said one of the investigative sources, who requested anonymity because he was not authorized to speak publicly.

Shares in Finmeccanica ended 3.8 percent lower at 3.89 euros on Tuesday.

"It's linked to the news of the arrest," a Milan trader said, referring to the stock decline.

The probe, led by prosecutors in Naples, is one of several under way at Finmeccanica. Chairman and Chief Executive Giuseppe Orsi is also under investigation over a 560 million-euro ($730 million) Indian helicopter contract.

Orsi has vowed to stay in his post to clear his name but some political parties have raised questions about whether he should remain at the helm of the country's second-biggest private group.

A meeting that was due to be held between Finmeccanica's top executives and the government last week was cancelled.

Asked about Finmeccanica top management, Italian Economy Minister Vittorio Grilli said: "I have no comments to make." (Additional reporting by Stephen Jewkes and Giuseppe Fonte; writing by Stephen Jewkes; editing by David Cowell and Matthew Lewis)

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