* BlackRock raised its stake in Telecom Italia in November
* Consob says should have been notified of investment
* BlackRock may have increased stake through convertible
* Telecom Italia to hold key EGM on Dec. 20
By Francesca Landini and Chris Vellacott
MILAN, Dec 15 Italian markets watchdog Consob
may fine the world's biggest money manager BlackRock Inc
for not informing the regulator soon enough that it had
increased its stake in Telecom Italia, Consob's
chairman told an Italian daily.
At the end of November BlackRock lifted its combined holding
in the telecoms operator to 10.1 percent from the 5.1 percent it
held in October, according to documents from the U.S. Securities
and Exchange Commission (SEC).
Crossing the 10 percent threshold obliges the company to
notify the regulators. BlackRock informed the SEC at the
beginning of December, but it did not tell Consob within a
five-day deadline as required.
A source familiar with the matter, however, said BlackRock
was still in compliance with Italian law, as the stake had only
exceeded the 10 percent threshold if convertible bonds were
included, and such bonds do not count as equity holdings outside
the United States.
The source said the U.S. investor would announce this on
A large stake in Telecom Italia could give the U.S. investor
a potentially pivotal role in a Dec. 20 shareholder vote on
whether to oust the Italian company's board.
"Our immediate reaction is the sanction procedure; we can
impose a fine of a maximum 500,000 euros ($700,000)," Consob's
Giuseppe Vegas told daily Il Sole 24 Ore on Sunday.
Consob could also temporarily suspend BlackRock's voting
rights on the stake not declared, Vegas said.
The Italian regulator has asked the U.S. group to make a
stock exchange statement on what its stake in the Italian
company is and whether it intends to be present at the next
shareholders meeting on Friday, Vegas was quoted as saying by
BlackRock is required to answer before trading starts on
An official for BlackRock declined to comment.
According to Vegas, BlackRock continued to buy shares in
December. It is unclear by how much the U.S. investor had
increased its stake, he said.
With its recent investments, BlackRock could have become the
second-largest shareholder in Telecom Italia after holding
company Telco, which controls the Italian phone company with a
stake of 22.4 percent, and ahead of businessman Marco Fossati,
who owns 5 percent.
Telecom Italia was also required to make a statement to the
exchange on when it was informed by BlackRock about its
investment before the market opens on Monday, Vegas said.
Consob has already opened a probe into Telecom's sale of a
convertible bond worth 1.3 billion euros at the beginning of
November to see whether the operation breached so-called related
A large part of the bond was sold to Spain's Telefonica
, which with Italy's Generali, Intesa Sanpaolo
and Mediobanca owns Telco. BlackRock and Och
Ziff Capital Management were also buyers of the bond.