September 7, 2018 / 1:33 PM / 2 months ago

Italy court to meet Sept. 15 on investor bid to block rival Carige board -sources

MILAN, Sept 7 (Reuters) - A Genoa court is set to hear a request by Carige’s top shareholder to block a rival list of candidates for the Italian bank’s board on Sept. 15, two sources familiar with the matter said.

Carige is embroiled in a governance crisis after its top investor fell out with the chief executive and a majority of board members stepped down over the summer.

The European Central Bank has told Carige to quickly solve its governance problems and fill a gap in its second-tier capital by the end of the year or seek a merger with a stronger bank.

Carige’s top shareholder Malacalza has challenged a slate of board candidates submitted by other leading investors, saying they failed to secure the necessary regulatory authorisations before building their stakes.

Legal experts say that, based on standard practice, the judge is likely to reach a decision in time for a Carige shareholder meeting called on Sept. 20 to appoint a new board.

A third source close to the matter also confirmed a ruling was likely by Sept. 20.

Vittorio Malacalza, a local businessman whose investment vehicle owns just over 24 percent of Carige and is its single largest shareholder, is seeking to oust CEO Paolo Fiorentino after pushing out his two predecessors over the past four years.

Malacalza has proposed replacing Fiorentino with UBS banker Fabio Innocenzi at the Sept. 20 meeting.

However, the current CEO, who pulled off a tricky cash call in December 2017, has the backing of three other prominent shareholders in the bank.

Malacalza is trying to stop them from presenting a board list on Sept. 20 to confirm Fiorentino in his job. (Reporting by Andrea Mandala, additional reporting and writing by Valentina Za, editing by Alexander Smith)

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