* Fastweb, Telecom Italia deny wrongdoing
* Telecoms billionaire Scaglia says is innocent
* Fastweb shares hit 15-month low, Telecom down 2.87 pct (Adds Telecom Italia statement, political context)
By Deepa Babington
ROME, Feb 23 (Reuters) - Italian prosecutors are seeking temporary business suspensions for broadband company Fastweb SpA and a Telecom Italia unit in a money-laundering probe in which Fastweb’s billionaire founder Silvio Scaglia faces arrest.
Scaglia, one of Italy’s richest men, and Nicola Paolo Di Girolamo, a senator from the governing coalition, were among 56 people for whom warrants have been issued, investigators said on Tuesday at a news conference.
Prosecutors allege the money was laundered via fictitious international phone service purchases and sales worth more than 2 billion euros ($2.72 billion) between 2003 and 2006, carried out with the knowledge of top executives at Fastweb and Telecom Italia’s Sparkle unit.
In separate statements, the companies denied any wrongdoing and said the investigation revolved around alleged tax evasion.
Fastweb FWB.MI, Italy’s No. 2 Internet service provider, closed down 7.55 percent at 15.05 euros and hit a 15-month low before recovering somewhat. Telecom Italia (TLIT.MI) shares fell 2.87 percent to 1.083 euros.
The inquiry comes as Italy grapples with allegations of high-level corruption ahead of regional elections next month.
Among the cases, the top appeals court will rule on Thursday on whether a British lawyer was rightly convicted for taking a bribe from now-Prime Minister Silvio Berlusconi in 1997. [ID:nLDE61K09O]
A separate corruption scandal involves the head of Italy’s civil protection agency, one of the prime minister’s top aides, who has denied any wrongdoing.
Telecom Italia, the country’s biggest phone company, said a prosecutor has asked a judge to bar its Sparkle unit from all business activity and to appoint a special administrator. A hearing is scheduled for March 2.
Telecom Italia said Sparkle and several people, including some managers from both the unit and the parent company, were included in the probe. [ID:nBIA237f9]
Fastweb, majority owned by Swisscom SCMN.VX, also said a judge would rule on a request for a “temporary commissioning” at a March 2 hearing.
Chief Executive Stefano Parisi and two managers are being investigated, Fastweb said. [ID:nBIA237d2]
Its former board member Mario Rossetti also faces an arrest warrant.
A statement from Scaglia’s lawyer said the entrepreneur was out of the country on business and denied any wrongdoing.
The arrest warrant marks a dramatic reversal of fortunes for Scaglia, who also founded Internet television company Babelgum.
A consultant in the early days of his career, his ascent began when he became the CEO of Omnitel, now Vodafone Group Plc (VOD.L) affiliate Vodafone Italy. He garnered the nickname “Wizard” there from colleagues for increasing the company’s mobile subscribers to 8 million from 300,000 in a short period of time.
He founded Fastweb in 1999 and sold his stake to Swisscom in 2007, allowing him to enter the ranks of the richest men in the world. (Writing by Ian Simpson, Editing by Jon Loades-Carter and David Holmes and by Gerald E. McCormick) ($1=.7361 Euro)