Olivetti shares fall to new low

Click to follow
Shares in Olivetti crashed to a new record low yesterday as the embattled Italian computer group continued to reel in the face of regulatory and criminal enquiries and mounting concerns over its financial standing.

Trading on the Milan bourse was suspended in mid-morning as the shares plunged 10 per cent to 516 lire (22p). Five attempts to resume trading failed. One investor said: "The stock is being treated like toxic waste."

The cause of the latest collapse was a statement from the stock market watchdog Consob containing a list of 16 unanswered questions about the state of Olivetti's balance sheet. Among the questions Consob is seeking answers to is the status of credits extended to "Russian government entities" by Olivetti and the credibility of the values put on those credits by Mediocredito Centrale, a bank wholly owned by the Italian Treasury.

Meanwhile, the criminal investigation launched by prosecutors into allegations that Olivetti's first-half accounts were falsified widened. Company officials confirmed that the former chairman, Carlo De Benedetti, had been named in the investigation along with his successor, Antonio Tesone, and Olivetti's former chief operating officer, Corrado Ariaudo.

Olivetti's shares have been in freefall since early this month when Renzo Francesconi quit as chief financial officer after just six weeks in the job, alleging that Olivetti had disguised the extent of its first-half losses.

The group's embattled chief executive, Francesco Caio, who has also been named in the criminal investigation, had been due to meet London-based investors owning more than a quarter of the shares yesterday to answer their concerns about Olivetti's financial standing.

But the meetings were called off at short notice.