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MILAN (Reuters) – Pirelli said on Wednesday that Italy’s Prime Minister’s Office opened an administrative procedure against its largest shareholder, China’s Sinochem, for a possible breach of provisions Rome imposed to shield the tyremaker’s autonomy.
Italy’s right-wing government last year used its “Golden Power” legislation, aimed at protecting assets deemed strategic for the country, to limit the influence of state-owned Sinochem on Pirelli.
Under the measure, Rome set requirements including a mandatory qualified majority for strategic decisions made by Pirelli’s board and ruled that the company should not be subject to instructions from the Chinese group.
Pirelli said on Wednesday the administrative procedure concerned the potential breach of a requirement to avoid any organisational or functional links between Pirelli and Sinochem.
The government’s provision is dated Oct. 31 and sets a 120-day period for the conclusion of the administrative procedure, Pirelli said.
Sinochem holds a 37% stake in Pirelli. The company’s second largest shareholder, with a 25.7% stake, is Camfin, the vehicle of Italian businessman Marco Trochetti Provera, who is Pirelli’s executive vice chairman.
Sinochem, through its CNRC vehicle, told Pirelli that it maintained to have always respected the measures set by the Italian government and was confident it would clarify its position during the procedure, Pirelli added.
Sinocherm was not immediately reachable for further comment.
(Reporting by Giulio Piovaccari; Editing by Leslie Adler)