Italy’s authorities are reportedly set to investigate the mass resignation of Telecom Italia’s board, as activist investor Elliott Management presses on with plans to install six independent executives at the operator’s helm.
Reuters reported market regulators in the country were preparing to open a probe into why four independent directors announced their intent to resign from the operator’s board alongside four which also held roles at Vivendi.
Italian authorities have regularly voiced concerns over the level of control largest shareholder Vivendi holds over Telecom Italia, imposing special requirements on the company and its management in October 2017.
Seven of the eight departing directors are scheduled to quit on 24 April, the same date as a proposed shareholder vote to re-elect the company’s board. As a result of a majority of executives departing, under Italian corporate rules, the whole board is assumed to have resigned and a new meeting arranged to appoint a new leadership team.
The resignations came in the wake of a move by Elliott Management to nominate six independent directors to run the company in place of the Vivendi-controlled board. The new meeting is slated for 4 May, although the 24 April meeting will still go ahead.
A statement from Telecom Italia’s auditors confirmed Elliot Management’s six independent board candidates would stand for election on 24 April, but another election would still need to be held on 4 May.
In a separate statement, Telecom Italia confirmed it had submitted its notification to communications regulator Agcom outlining the terms of the separation of its fixed business into new company NetCo.
The measure – outlined by the company earlier this month – follows significant pressure from authorities to separate the unit. Its notification to Agcom was hailed in a Telecom Italia statement as “a significant step forward”.