July 22, 2011 / 10:13 AM / 8 years ago

UPDATE 3-Finmeccanica chairman probed over slush funds

* Finmeccanica chairman under formal investigation

* Company denies making irregular payments

* Shares down 1.3 pct

(Adds comment from company, updates shares)

ROME, July 22 (Reuters) - Pier Francesco Guarguaglini, chairman of defence and aerospace group Finmeccanica , has been put under investigation by Rome prosecutors examining allegations of secret slush funds, legal sources said on Friday.

The investigation, part of a long-running case involving Finmeccanica, centres on allegations that false invoices were created by companies controlled by the group. They are then said to have been used to pay secret commissions.

Finmeccanica, Italy’s biggest defence and aerospace group, denied the allegations in a statement on Friday.

“Any suggestion of irregular payments by Finmeccanica is totally without foundation,” the company said. “Finally, Finmeccanica rejects any accusation that it has ever created any kind of illegal funding mechanisms,” it added.

Guarguaglini, 74, has spent almost his entire career at Finmeccanica and occupies a central place in Italy’s business and defence establishment.

He is being investigated along with about 15 other people, the legal sources said.

La Repubblica daily said the alleged slush funds were set up through a company called Selex and were used to pay commissions to former consultant Lorenzo Cola, in connection with the 2008 acquisition of U.S. defence group DRS Technologies.

Cola was arrested last year on charges of involvement in money laundering following a probe into Digint, a group 49 percent owned by Finmeccanica.

Digint was investigated for possible links with businessman Gennaro Mokbel, who was also arrested last year on suspicion of money laundering.

Finmeccanica said on Friday that all the payments it made to Cola were registered normally in its accounts.

Finmeccanica shares were down 1.3 percent at 7.44 euros by 1432 GMT.

(Writing by James Mackenzie and Catherine Hornby; Editing by Jon Loades-Carter and David Cowell)

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