Post by : Saif Rahman

Italy’s Monte dei Paschi di Siena (MPS), one of its most historic banking institutions, along with its two largest stakeholders, is currently under investigation in Milan regarding the bank’s recent acquisition of investment firm Mediobanca. This inquiry centers on possible breaches of market regulations associated with the €16 billion ($19 billion) deal, which stands as Italy’s largest banking transaction in recent times.

MPS has acknowledged receiving notification of allegations against its CEO, Luigi Lovaglio, aged 70, and stated it is fully cooperating with investigators. The bank expressed confidence in its ability to clarify the situation while voicing trust in the authorities involved.

The takeover of Mediobanca, which was finalized in September, received backing from the Italian government and is a significant component of ongoing mergers transforming the nation’s financial landscape. Prosecutors in Milan have claimed that Italy’s market regulatory body, Consob, the European Central Bank (ECB), and insurance authority IVASS were not adequately informed of the coordinated behaviors exhibited by MPS and its principal investors during the acquisition process. The focus is on potential market manipulation and obstruction of regulatory oversight.

As news of the investigation surfaced, MPS shares dipped by 4.6% by the end of trading. Neither the ECB nor Consob provided immediate comments on the matter.

The primary stakeholders of MPS include Francesco Gaetano Caltagirone, a prominent construction figure, and Delfin, the investment firm of Italy’s Del Vecchio family, led by Francesco Milleri of EssilorLuxottica. Both factions were vital supporters of MPS’s acquisition plans and held considerable stakes in Mediobanca. They had secured their shares in MPS in November 2024 after the Italian Treasury divested a portion of its stake as part of the bank’s re-privatization process.

This investigation regarding Lovaglio, Caltagirone, and Milleri has been active since June, although the public was only informed recently following related searches conducted by prosecutors. Both Delfin and Caltagirone maintain that their actions adhered to all applicable laws and market standards and intend to continue their cooperation with authorities.

MPS has undergone office searches this week, according to anonymous sources with knowledge of the investigation. Milan's prosecuting team on this case includes Roberto Pellicano, Luca Gaglio, and Giovanni Polizzi.

The Mediobanca acquisition took place shortly after the Italian Treasury reduced its holding in MPS from 68% to about 12%, enabling the bank’s acquisition attempt. This investigation brings to light concerns regarding corporate governance and regulatory supervision in Italy’s financial environment, drawing keen attention from both investors and government officials.

As Italy confronts this significant inquiry, the repercussions could bear substantial influence on MPS, its shareholders, and the overall financial and investment arena in Europe.

#Global News