Quantcast

Fazio faces magistrates in Italy takeover scandal

October 10, 2005

By Valentina Consiglio

ROME (Reuters) – Bank of Italy Governor Antonio Fazio was
questioned on Monday by magistrates investigating a bank
takeover scandal that has prompted calls for his resignation
and tainted Italy’s image.

Fazio’s court appearance has taken the affair to a new
level, putting it in the hands of the judiciary after Italy’s
politicians appeared to have lost interest because of their
inability to oust him.

Communications Minister Mario Landolfi reiterated on Monday
that it would have been better if Fazio had resigned and said
he regretted that the case, which has poisoned the political
debate, has ended up in court.

“Unfortunately I see there is a legal remnant to the affair
which certainly doesn’t help to improve the atmosphere,” he
said in a radio interview.

Fazio arrived at the Rome courts building just before 10
a.m. (0800 GMT) and walked briskly into the offices of Chief
Rome Prosecutor Giovanni Ferrara and Achille Toro, who is
leading the bank probe.

After more than four hours of questioning magistrates
called for a brief pause for coffee before the interrogation
resumed.

One of Fazio’s lawyers, Roberto Borgogno, told reporters
Fazio had agreed to answer the prosecutor’s questions and not
to exercise his right to remain silent.

Fazio was placed under official investigation in August
over accusations that he unfairly favored Banca Popolare
Italiana over Dutch competitor ABN AMRO for control of domestic
lender Antonveneta.

The Bank of Italy’s chief inspector, Francesco Frasca, is
also being investigated for abuse of office.

Being placed under investigation does not mean charges will
necessarily be brought. There was no immediate comment from the
Bank of Italy on Monday’s questioning but it has previously
reiterated it handled the takeover battle correctly.

WIRETAPS

Fazio has been in the spotlight since wiretaps, leaked to
the press in July, showed his warm relation with the former CEO
of Pop Italiana, prompting calls for Fazio to step down.

Although Prime Minister Silvio Berlusconi and several
government minister have urged Fazio to quit, the central
banker — who does not report to the government — has
resisted.

Berlusconi, the cabinet and Italy’s parliament have chosen
to take no formal steps against Fazio and the European Central
Bank has indicated it could not intervene even if it wanted to.

The Bank of Italy’s Superior Council, the only body which
can fire Fazio, last month expressed confidence in him. Fazio
has an open-ended mandate.

Italy’s biggest newspaper, Corriere della Sera, said Fazio
would stick to the defense he made in a speech on August 26 to
a government interministerial committee in which he said the
central bank had not broken any laws.

After questioning Fazio, prosecutors will have several
weeks to decide whether or not to press charges. A judge would
have to accept any proposed charges before Fazio could be sent
to trial. Abuse of office carries a jail term of up to three
years.

Fazio has not spoken publicly about the scandal and he did
not speak to reporters when he entered the court house.

Corriere della Sera said the magistrates would likely ask
Fazio to discuss his relationship with Gianpiero Fiorani, Pop
Italiana’s former CEO.

The central bank governor oversees the financial sector and
is meant to be an impartial arbiter. The wiretaps showed both
Fazio and his wife advising Fiorani on the takeover plan.

Fazio eventually overruled the central bank’s technical
department, which had advised against letting the much smaller
Pop Italiana bid for Antonveneta.

Fiorani resigned as CEO in mid-September after he was
placed under investigation for possible crimes ranging from
insider trading to market-rigging.

Pop Italiana eventually withdrew its bid for Antonveneta,
leaving the way clear for Dutch bank ABN AMRO.




comments powered by Disqus