Italy PM Renzi's ally, Tiscali head, convicted of tax evasion

ROME (Reuters) - Renato Soru, Italian leftist politician and chairman of multinational telecoms company Tiscali was handed a three year jail sentence for tax evasion on Thursday.

The verdict is a political embarrassment for Prime Minister Matteo Renzi because Soru is the head of Renzi’s Democratic Party (PD) in Sardinia and a PD member of the European Parliament.

Soru, who founded Tiscali in 1998, said he was surprised by the “unjust” verdict issued by the court in the Sardinian capital Cagliari.

Prosecutors accused him of evading 2.6 million euros ($3 million) of taxes through a financial operation involving a loan to Tiscali made by another company owned by Soru.

Soru’s lawyer told Reuters that his client would appeal. Under Italian law, he will not go to jail unless the sentence is confirmed at the end of the appeals process.

Renzi has been under growing pressure in recent months over scandals involving his government and members of the PD.

At the end of March his industry minister resigned in an influence peddling scandal and this week the PD mayor of the northern city of Lodi was arrested for allegedly rigging public tenders.

“The immorality of the PD continues, who will be next?,” Beppe Grillo, founder of the anti-establishment 5-Star Movement (M5S), Italy’s largest opposition party, wrote on his blog.

The PD remains Italy’s most popular party, according to opinion polls, but its lead over M5S has been narrowing steadily and most recent polls put the gap at between two and five percentage points.

Additional reporting by Elisa Anzolin; Editing by Robin Pomeroy