Reuters File Photo: Mediobanka, Italy Headquarters, Milan, Italy, November 8, 2019. Reuters / Flavio Lo Scalzo / File photo
Written by Gianluca Semeroro and Valentina Ja
MILAN (Reuters) – Mediobanka (OTC) on Friday approved a request from its top shareholder Leonardo del Vecchio to the manager of the Italian Merchant Bank to reject the three-board seat reservation rule.
Welcoming the decision “with deep satisfaction”, Del Vecchio withdrew the second proposal to amend the rules of the counter company, which was criticized by the board of Mediobanka.
Mediobanka further complained that Del Vecchio failed to negotiate with the company’s proposal, which he wanted to put in a shareholder vote at the Oct. 28 general meeting, which is considered the norm for listed companies.
Del Vecchio last month proposed amending MedioBanker’s governance rules to make the board more diversified and independent of management, its first formal move to bring about change to the group since it became its sole largest investor.
Spect-year-old spectacles giant Luxotica bought Mediobanka 1i% after receiving a waiver from European regulators on the condition that it would not interfere in the bank’s operations.
In the past, Del Vecchio has criticized Alberto Nagel, CEO of Mediobanka, although he praised Nagel’s latest business plan.
The two are embroiled in a governance tussle at Italy’s largest insurer General (MI :), where both Del Vecchio and Mediobanka are investors.
Mediobanka said that while the company benefited from having top managers among its managers, it was a statutory requirement that it planned to drop next year in light of discussions with institutional investors and shareholder advisory firms.
Mediobanka was critical of Del Vecio’s second proposal, which said there was a risk of penalizing institutional investors who owned half of Mediobanka.
Delfin, the holding company of Dell Vecchio, said late Friday night that it would withdraw the offer to avoid confusing investors, as the board of Mediobank had decided to present an alternative offer if Dell Vecchio’s offer was rejected.
Currently, most of the directors of Mediobanka come from the list that gets the most votes from the shareholders, the second two seats are reserved for the list of the most votes.
Del Vecchio proposed increasing the number of seats reserved for the minority list by three or four, each appointing a director based on the number of votes cast, if they exceed the 5% limit.
Under the MedioBankar Board’s alternative proposal, one-fifth of the directors will come from the minority list, with at least one seat reserved for representatives of institutional investors. The 5% threshold will be reduced to 2%.
“Delphin has finally been able to launch a process to improve the governance of Mediobank … to increase management accountability,” said Delphin.
“In light of these fundamental findings, when Delphin believes that its proposal is a priority … it is in the interest of the bank and its shareholders … that only the board’s proposal is placed before the shareholders.”
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