July 18, 2018 / 6:55 PM / in 10 months

Carige's top investor threatens legal action over bank's management

MILAN, July 18 (Reuters) - Banca Carige’s top shareholder Vittorio Malacalza on Wednesday threatened potentially to take legal action against the bank’s management in an escalating boardroom row that could put the Italian lender’s turnaround at risk.

Malacalza, a businessman who owns 20.6 percent of the Genoa-based bank and is its deputy chairman, resigned as director earlier this week due to disagreements with the board over the management of the bank and its governance.

His resignation, which will be effective once a new deputy chairman is appointed at an upcoming shareholder meeting, follows that of Chairman Giuseppe Tesauro and two other directors this month.

In a statement on Wednesday, Malacalza said the same reasons that prompted his resignation led him to ask a lawyer to look into “documents, actions and moves taken by top executives in the course of the troubled management of Carige to assess whether there are any elements of a criminal nature ... reserving the right to take necessary steps to protect his interests”.

Carige has long been dogged by governance issues and investment bankers say concerns about potential shareholder conflicts complicate its search for a merger partner.

The lender struggled to push through a cash call demanded by regulators at the end of last year, and is working to reduce a large soured-loan burden under Chief Executive Paolo Fiorentino, a former veteran UniCredit manager.

Fiorentino was appointed CEO a year ago after Malacalza fell out with the previous chief executive. Malacalza, however, criticised the handling of the recapitalisation under Fiorentino.

Former Chairman Tesauro told two newspapers that Fiorentino was acting too independently and wanting to turn Carige into a public company where “he alone has a say”. The CEO denied this.

In a statement to media on Wednesday, Fiorentino said that he was “not worried at all” about Malacalza’s threat and urged lawyers to examine any documents they wanted.

The escalating spat between Fiorentino, Malacalza and the bank’s board members has prompted another leading shareholder to step in to defend the CEO at the last general shareholder meeting.

Financier Raffaele Mincione emerged this year as one of Carige’s top shareholders with a 5.4 percent stake. He has since raised that holding to below 9.9 percent and is seeking backing for a slate of board nominees he plans to propose at an upcoming shareholder meeting, a source close to Mincione said.

Last week Mincione asked for a shareholder vote on removing the bank’s board and appointing a new one. That shareholder meeting will likely be held in the second half of September. (Reporting by Agnieszka Flak and Valentina Za; Editing by Adrian Croft)

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