MILAN, April 12 Shareholders at Italy's Banca
Popolare di Milano on Saturday rejected a governance
reform aimed at giving institutional investors a greater say in
the cooperative bank and making its shares more attractive.
The decision comes only a few weeks before the launch of a
500 million euro ($694 million) rights issue to beef up the
bank's balance sheet as the European Central Bank reviews its
The governance reform and the capital increase are
conditions set by the Bank of Italy for the removal of
"add-ons", an additional risk-weighting of assets that forces
the Milanese bank to set aside more capital.
The governance change failed to achieve the two-thirds
majority needed for approval at an annual meeting. It had
envisaged giving institutional investors the right to appoint
six of the 15 members of the supervisory board, with the aim of
limiting the power of employee shareholders and union
The Bank of Italy has repeatedly encouraged Popolare Milano
and other Italian cooperative lenders to increase investor
control over management to make themselves more attractive to
An attempt to transform the bank into a joint-stock company
had already failed, prompting top investor Andrea Bonomi to sell
his entire 8.6 percent stake on the market.
Last week, the French bank Credit Mutuel said it had sold
its 6.9 percent stake in Popolare Milano, having first taken a
stake in the bank in in 2004.
($1 = 0.7201 Euros)
(Reporting by Andrea Mandala, writing by Danilo Masoni; Editing
by Kevin Liffey)