ROME The Vatican on Tuesday denied an Italian newspaper report linking its IOR bank to Monte dei Paschi di Siena's (BMPS.MI) 2007 acquisition of smaller rival Antonveneta, a deal which is now the center of a widening corruption investigation.
The Corriere della Sera reported on Monday that the chief executive of the Vatican's Institute for Works of Religion (IOR) had "delicate and important meetings" with Monte Paschi's adviser for the 9-billion euro purchase of Antonveneta.
It also listed several sets of numbers it said identified IOR bank accounts used to transmit funds to Monte Paschi for the acquisition. Prosecutors are looking into allegations that bribes were paid to secure the deal.
The secretive Vatican bank has faced heavy criticism in the past for its lack of transparency and last year Moneyval, a committee backed by the Council of Europe, urged it to take more action against money laundering.
The Vatican denied the Corriere della Sera report and said the IOR numbered its bank accounts differently to the number sets in the article.
"Not only did the IOR meetings on the Antonveneta question mentioned in the Corriere article never take place, but it can be ruled out that Monte Paschi executives had funds from IOR," Holy See spokesman Father Federico Lombardi said.
The statement followed a briefer denial on Monday, when Lombardi said the Corriere report was "not reliable" and no such meetings took place.
Monte Paschi, which now depends on a 3.9 billion euro state loan, paid Banco Santander SA (SAN.MC) more than 9 billion euros ($12 billion) in cash for Antonveneta, only weeks after the Spanish bank had bought it for 6.6 billion.
It later racked up heavy losses on derivatives and structured finance deals, apparently put in place to massage accounts and help soften the impact of the costly acquisition on its badly weakened capital base.
(Reporting by Philip Pullella; Writing by Naomi O'Leary; Editing by Alison Williams)