Reuters: Private Equity: Milan prosecutors step up FonSai group probe-source

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Milan prosecutors step up FonSai group probe-source Mar 27th 2012, 16:03 MILAN, March 27 | Tue Mar 27, 2012 12:03pm EDT MILAN, March 27 (Reuters) - Milan prosecutors have stepped up a probe into Italy's Premafin group, controlled by the Ligresti family, in a move that could have repercussions for its troubled insurance unit Fondiaria SAI, an investigative source said on Tuesday. Milan prosecutor Luigi Orsi launched an investigation last year into allegations that Salvatore Ligresti, the patriarch of the family that controls Fondiaria SAI, had withheld information from stock market regulator Consob over a failed takeover bid by French insurer Groupama for Italy's second-largest insurer. The development is the latest step in a complex financial and judicial saga which nearly drove Fondiaria SAI into the ground. Over the last few days, Orsi has taken testimony from auditors from both Fondiaria and Premafin over former management decisions which have been questioned by some shareholders including U.S. fund Amber Capital, the investigative source told Reuters. Issues that magistrates are looking into include consultancy fees worth 40 million euros ($53.30 million) paid by Fondiaria SAI to Salvatore Ligresti and communication to the market about a bid by insurer Unipol for Fondiaria, the source said. The source said magistrates were mulling possible charges of market rigging and insider trading relating to the Unipol bid, but added that, at present, no one was the subject of any investigation with regard to these latest developments. "From the investigations an alarming situation is emerging," the source said with reference to the case but without giving details. In January, Bologna-based insurer Unipol, Italy's No.3 insurer, agreed to a 1.7 billion euro deal to save Fondiaria through a four-way takeover and three capital hikes. Since the Unipol plan was released, Fondiaria SAI shares have risen more than 100 percent. Italian private equity funds Palladio Finanziaria, with roots in Italy's rich northeast, and Sator, founded by turnaround banker Matteo Arpe, have launched a rival bid for the Fondiaria SAI group. The funds have raised questions with Italian regulators over the bid. The Ligresti family, which controls holding company Premafin, took over the reins of power at Fondiaria ten years ago. The loss-making insurer has seen its market capitalisation wither to 550 million euros from 5 billion euros five years ago. Premafin and Fondiaria were not immediately available for comment. ($1 = 0.7504 euros) (Reporting by Manuela D'Alessandro; Writing by Stephen Jewkes; Editing by David Cowell) Link this Share this Digg this Email Reprints

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