De Benedetti reasserts grip on Olivetti
Thursday 19 September 1996
Roberto Colaninno, managing director of Sogefi, the automotive group controlled by Mr De Benedetti's CIR industrial holding company, is succeeding Mr Caio, who quit after a lengthy and reportedly acrimonious emergency board meeting yesterday. Mr Caio had only been chief executive for two months.
A spokesman for Olivetti said Mr Caio resigned because of the failure to agree on the powers that the company's four-man executive committee should have. The committee was formed a fortnight ago after the company was rocked by shock allegations that Olivetti had disguised the extent of its first-half losses. Olivetti's shares have fallen 40 per cent this month, and have been described by one trader as being akin to "toxic waste".
This latest twist means that Mr De Benedetti, a big shareholder in Olivetti, has two staunch allies on the executive committee. Besides Mr Colaninno, the committee includes Rodolfo De Benedetti, son of Mr De Benedetti who resigned as chairman two weeks ago.
Antonio Tesone, who was drafted in to replace Mr De Benedetti as chairman, publicly endorsed the appointment of Mr Colaninno. "The results obtained as managing director of the Sogefi group, the international experience that he has matured and the human qualities and the stability I know him to be endowed with made him the ideal candidate," he said.
The powers of the executive committee were finally agreed after Mr Caio's resignation, but have yet to be detailed. However, Mr Tesone said the committee had agreed to take legal action against Renzo Francesconi, whose public questioning of the accuracy of Olivetti's half-year results brought the crisis to a head.
Mr Francesconi resigned as director-general a day after Mr De Benedetti quit.
Mr Tesone said last night that lawyers had been instructed to sue Mr Francesconi "for his groundless declarations and his irresponsible behaviour".
It also emerged yesterday that the reported first-half loss of 440bn lire included a capital gain of 64bn lire on the sale of part of Olivetti's stake in the British computer group Acorn.
Olivetti sold 13.25 million shares in Acorn, representing just under 15 per cent of the company, to the US investment bank Lehman Brothers in July. Yesterday Olivetti said that the 64bn lire was deposited with Lehman and would be paid over in stages as the shares were placed in the market.
Lehman was lead manager on Olivetti's pounds 913m rescue rights issue last December which resulted in several London-based investors emerging with a stake of 30-40 per cent in Olivetti.
The investors, which include ING Barings Asset Management and PDFM, played a big part in Mr De Benedetti's removal after 18 years at the helm of Olivetti.
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