Telecom Italia’s board hit back at a series of accusations made by top shareholder Vivendi regarding the running of the operator, and offered its full backing to current chairman Fulvio Conti and CEO Luigi Gubitosi (pictured).
The row between activist investor Elliott Management, which currently controls Telecom Italia’s board, and top shareholder Vivendi has ramped in recent weeks, as a crunch shareholder meeting nears.
In a statement, Telecom Italia’s board defended itself against a number of allegations regarding actions “deemed unlawful” by Vivendi, including an unwarranted impairment of €2 billion and accusations the board used the circumstances leading to the charge to revoke powers assigned to former CEO Amos Genish, among others.
Gubitosi replaced Genish in November 2018, and Vivendi has accused Conti and Gubitosi of violating corporate and governance rules by siding with Elliott Management.
However, in a meeting held yesterday (14 March), the operator’s board of directors gave both executives their full backing.
It said the removal of Genish was a decision made by the majority of the board because of a “progressive loss” in faith that he could tackle market conditions effectively.
Vivendi had said the revocation of the powers of Genish represented a “coup” for the board.
In a statement, the operator’s board explained: “The attribution of powers to Luigi Gubitosi represented, and represents, the best possible solution for the company and for all its shareholders, also taking into account of the need to minimise the risks deriving from the continuation of periods of uncertainty. The board therefore reaffirms its full confidence in the work of Luigi Gubitosi.”
The board gave a similar message about the chairman, stating his activity “was in accordance with his duties to prepare and lead the work of the board, and there is no reason to doubt his independence”.
Vivendi has called the shareholder meeting, scheduled for 29 March, to vote on the removal of five Elliott Management-appointed directors. Two proxy advisory companies have recommended shareholders vote against Vivendi’s proposal.Subscribe to our daily newsletter Back