Monte dei Paschi board to discuss probe of CEO over Mediobanca, source says

By Valentina Za

MILAN, Dec 3 (Reuters) - Monte dei Paschi di Siena's board will meet on Friday to discuss an investigation by Milan prosecutors into the Italian bank's CEO Luigi Lovaglio and its top two shareholders, a person with knowledge of the matter told Reuters.

Lovaglio and the biggest investors in MPS, construction group Caltagirone and Delfin, the holding company of the Del Vecchio family, are under investigation in relation to the bank's takeover of Mediobanca.

All three parties have denied any wrongdoing and have expressed confidence the probe will show they acted in compliance with existing laws and market rules in Italy.

A judicial document reviewed by Reuters showed the Milan prosecutors are alleging market rigging and hindrance of supervisory action in the Mediobanca takeover, which is the biggest so far in a round of Italian banking deals.

Prosecutors allege Delfin and Caltagirone, aided by Lovaglio, acted in coordination to seize power over Mediobanca, which MPS acquired control of in September after a 16 billion euro ($18.7 billion) share and cash offer.

Delfin and Caltagirone have long been the top investors in Mediobanca and Generali, which is Italy's biggest insurer and the crown jewel of the country's financial system.

Mediobanca is Generali's biggest investor, alongside Caltagirone and Delfin, who had clashed with the CEOs of both institutions in recent years.

The prosecutors said in a search and seizure warrant that Delfin and Caltagirone aimed to gain control of both Mediobanca and Generali and used MPS to achieve that aim.

The two became MPS shareholders in November 2024, when Rome placed a 15% stake in the bailed-out bank as it looked to build a core of more stable Italian shareholders.

The MPS takeover of Mediobanca, which was announced in January, led to the replacement of its CEO Alberto Nagel, but Philippe Donnet remains CEO of Generali.

By extending the duration of their inquiry until after the conclusion of the takeover deal, prosecutors have avoided interfering with the outcome, judicial sources told Reuters.

However, with Lovaglio's tenure as CEO coming up for renewal in the spring and MPS due to present its strategy for the combined group in the first quarter, the investigation could hinder progress on integrating Mediobanca, analysts said.

($1 = 0.8591 euros)

(Reporting by Valentina Za; Editing by Alexander Smith)