September 9, 2019 / 2:05 PM / 11 days ago

Russian bioplastic project lifts shares in Italy's Bio-on

MILAN (Reuters) - Russian petrochemical group TAIF JSC plans to produce bioplastic based on technology licensed by Italy’s Bio-on, they said in a joint statement on Monday, boosting shares in the Italian company.

Shares in beleaguered Bio-on leapt more than 20% to 20.90 euros, recovering some of the ground lost after recent allegations of accounting irregularities.

TAIF aims to begin production in 2021, Monday’s announcement said, after the construction of a plant able to produce 10,000 tonnes a year of the environment-friendly plastic.

The Russian group has obtained the construction authorisation to build the new plant, the companies said.

Bio-on shares had plunged 73% in two days at the end of July after U.S. hedge fund Quintessential Capital Management called Bio-on “a massive bubble based on flawed technology and fictitious sales”.

The Italian company says it has developed a process for the production of biodegradable plastic from agricultural waste. It has repeatedly denied the Quintessential accusations and also filed a legal complaint against the hedge fund.

Italian prosecutors have opened an investigation into possible market manipulation, a judicial source said on July 26.

Reporting by Francesca Landini; Editing by David Goodman

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