Telecom Italia said a proposal put forward by a shareholder to remove the board of directors from office has been rejected by a narrow majority, allowing CEO Marco Patuano to press ahead with his plans to turn round the company's fortunes.
Rebel investor Marco Fossati, who holds a 5 per cent stake through his holding company Findim, told Reuters he plans to continue his fight to weaken the influence of Telefónica within the group. At the meeting, Patuano denied allegations that Telefónica is directing the Italian company's board.
"It was a strong signal from the market and it must listened to. We went very close (to winning) and we will go on," Fossati told reporters, Reuters reported.
The motion to oust the current board, whose tenure expires in April, was rejected by a 50.3 per cent majority, Reuters added.
Fossati is particularly concerned that Telecom Italia will sell its Brazilian asset Tim Brasil, which he sees as an essential asset for the future of the Italian operator. According to Bloomberg, Patuano said Telecom Italia's Brazilian business is strategic, and confirmed only the company plans to sell assets, including wireless towers, to reduce its debt.
Tim Brasil competes with Telefónica's Vivo unit in Brazil, and Telefónica's growing influence over Telecom Italia has raised antitrust concerns in Brazil. It has recently been reported that Telefónica has 18 months to reach a solution in Brazil after antitrust regulator Cade told it to either sell its indirect interest in Tim Brasil or find a new partner for Vivo.
Earlier this month, Telefónica CEO Cesar Alierta and a former executive Julio Linares stepped down from Telecom Italia's board to avoid the perceived conflicts of interest in Brazil.
Meanwhile, Italian prosecutors said they are investigating the shareholding structure of Telco, which owns 22.4 per cent of Telecom Italia. Telefónica owns 66 per cent of Telco and recently secured an option to gradually take over the stakes of its partners Assicurazioni Generali, Intesa Sanpaolo and Mediobanca starting next year.
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