(Clarifies source of allegations)
SIENA, Italy Feb 6 Monte dei Paschi
lied to the Bank of Italy about the terms of the so-called FRESH
2008 hybrid instrument, worth around 1 billion euros, which it
used to partly fund its acquisition of Antonveneta, prosecutors
alleged in a document obtained by Reuters on Wednesday.
In the document, prosecutors alleged that Monte dei Paschi's
then chief financial officer Marco Morelli had signed an
indemnity document in favour of J.P. Morgan which was hidden
from the regulator. J.P. Morgan in 2008 underwrote a 1 billion
euro capital increase in Monte dei Paschi, and then structured
the Fresh 2008 hybrid instrument, convertible in Monte dei
Paschi's shares, and sold it to a number of investors.
J.P. Morgan in Milan declined to comment.
Prosecutors alleged in the document that Morelli also gave a
so-called indemnity side letter to Bank of New York, which acted
as an intermediary in the FRESH 2008 deal, "at the time of a
meeting of the FRESH investors", which the prosecutors said was
also hidden from the regulator.
Prosecutors alleged that the indemnity side letter violated
requirements set by the Bank of Italy by making the FRESH 2008
work like a bond rather than an hybrid equity instrument.
(Reporting By Silvia Ognibene, writing by Silvia Aloisi;
Editing by Alexander Smith)