Italian broadband operator Fastweb has denied any involvement in an alleged €300 million tax fraud and money laundering scam.
But the operator has proposed to surrender control of its wholesale business to an independent overseer until an investigation into the operator's involvement in the alleged criminal activities is concluded.
The concession, which would see a court-approved overseer take control of the unit, is an attempt to avoid having a commissioner appointed in control of the entire company, Reuters said.
Prosecutors have requested that the Swisscom subsidiary be placed under a special administration process while the investigation is held.
But the company has ruled out any board changes in its proposal, and Swisscom has announced that he sees no reason to stop backing Fastweb CEO Stefano Parisi.
Fastweb and Sparkle have both denied any accusations of wrongdoing. Fastweb founder Silvio Scaglia last week separately denied he had any role in the alleged activities.
Prosecutors allege that Fastweb and fellow broadband provider Sparkle – a Telecom Italia subsidiary - were involved in a complicated tax fraud and money laundering scheme, FT.com said.
The operators are accused selling phantom broadband services to companies ranging from the US to the UK to Finland, as part of a complex tax fraud scam.
Court documents obtained by FT include allegations of pay-offs to police, and connections to an alleged Mafia-rigged election of an Italian senator. The investigation relied mostly on wiretapping.
Both Fastweb and Sparkle have stated that they are being investigated only for tax fraud.