TURIN, July 12 The chairman of carmaker De
Tomaso, Gian Mario Rossignolo, and two other men were arrested
in a probe to determine whether they may have misused 7.5
million euros ($9.2 million) of public funds in a failed
turnaround plan, Italy's tax police said on Thursday.
The botched De Tomaso turnaround aimed to use a former
Pininfarina factory on the outskirts of Turin to
produce SUVs and sports cars. Its collapse leaves about 1,000
workers unemployed, and points to the difficulties local
authorities face in reconverting shuttered car factories as
automakers take measures to cope with years of losses.
Peugeot announced on Thursday it is firing 8,000
workers and shuttering a plant outside Paris in 2014.
Rossignolo's and the carmaker's lawyers were not immediately
available for comment. De Tomaso filed for bankruptcy earlier
this year after Rossignolo's plans to re-launch the maker of the
Pantera sports car collapsed because he failed to find financial
The Turin prosecutors office opened a probe a few months ago
asking the tax police to ascertain how De Tomaso was making use
of public funds.
Police said in a statement that investigators believe the
managers may have used a false bank guarantee to receive funds
from the region of Piedmont and from the European Union, and
that some of the money may have ended up in the three men's bank
De Tomaso received several million euros in public funds for
re-training of 1,000 workers starting in January. The workers
have been on temporary layoff since 2010.
In May, the Piedmont region asked the company to refund 5
million euros it had granted to the carmaker.
Now under house arrest, Rossignolo is a former Fiat
executive best known for a short and turbulent stint as chairman
of Telecom Italia SpA (TITL.MI) in 1998. Also arrested were the
head of De Tomaso's human resources office, and a financial
($1 = 0.8164 euros)
(Reporting by Elisa Sola and Ilaria Polleschi; Writing by
Jennifer Clark; Editing by Erica Billingham)