Fiorani’s arrest focuses attention once more on Italy’s bank takeover scandal |

Fiorani’s arrest focuses attention once more on Italy’s bank takeover scandal

ROME – The arrest of former Banca Popolare Italiana Chief Executive Gianpiero Fiorani highlights his spectacular fall from grace and has put the spotlight back on Bank of Italy Governor Antonio Fazio and his handling of BPI’s bid for Banca Antonveneta.Fiorani was jailed along with BPI’s former Chief Financial Officer Gianfranco Boni in connection with the investigation into the bank’s takeover bid for Banca Antonveneta SpA. Charges against them include criminal association for market rigging.The case exploded last summer when phone taps reported in the Italian media suggested Fazio had favored BPI’s bid over that of its Dutch rival, ABN Amro Holding NV.Fazio, whose friendship with Fiorani has been widely documented in the Italian press, is being investigated for abuse of power linked to his approval of BPI’s bid.He has denied discriminating against a foreign rival, and has resisted widespread calls for his resignation. Italian Premier Silvio Berlusconi on Wednesday reiterated earlier statements that the government has no powers to oust Fazio.”The government has no institutional powers to end the governor’s mandate,” Berlusconi said.Fazio said Fiorani’s arrest did not trouble him.”My conscience is clear, I have always applied the law correctly. If Fiorani has done something illicit, we have nothing to do with it,” the governor was quoted as saying in Wednesday’s editions of Milan daily Corriere della Sera.Fazio’s critics claim the case has gravely damaged Italy’s credibility, and the arrest of Fiorani and his associates is likely to re-ignite the criticism.Luca Cordero di Montezemolo, head of Italy’s industrialists’ lobbying group Confindustria, said Wednesday that the case showed “an unacceptable general level of ethics” in Italy.In comments reported by the ANSA news agency he repeated calls for the dilution of the central bank’s powers of oversight, adding that the institution “has lost much credibility in the world of finance and international dealings.”A day earlier, the European Commission launched a legal case against Italy for obstructing ABN Amro’s bid and that of Spain’s Banco Bilbao Vizcaya Argentaria SA for Italy’s Banca Nazionale del Lavoro SpA.After a six-month takeover battle, Popolare Italiana backed off from its bid and agreed in September to sell its stake in Antonveneta to ABN Amro.As the investigation into the takeover battle developed, Milan prosecutors suspended several top officials at BPI from their posts.Their probe has focused on loans used to inflate BPI’s share price as it struggled to take control of the much bigger Antonveneta.The prosecutors also say Fiorani and others agreed to divide up profits earned from illegal operations including the market rigging.BPI’s bid came at the end of a period of rapid expansion of the bank under Fiorani’s leadership.On Wednesday, Italian tax police raided the homes and offices of past and present Banca Popolare Italiana officials, including Fiorani and those arrested alongside him, according to reports by news agencies ANSA and Apcom.Nobody was available at the Milan tax police offices to confirm the reports. Calls to Fiorani’s lawyers were not answered.Vail, Colorado

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