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Here is what the government’s golden power over Pirelli provides for, according to Pirelli

11 months ago babelfish

Here is what the government's golden power over Pirelli provides for, according to Pirelli

All the prescriptions decided by the government towards Pirelli and the Chinese shareholders of Sinochem.

Pirelli reveals all the prescriptions adopted by the government on June 16 with the activation of the special powers ( Golden Power ).

On June 18, with a note, the Pirelli group with a note detailing all the prescriptions that must be respected by the Chinese shareholder.

The measures are intended to protect the independence of Pirelli and its management and to protect technologies and information of strategic importance.

Prescriptions which – reads the note – «have the purpose of preparing a network of measures operating overall to protect the independence of Pirelli and its management, as well as to protect the technologies and information of strategic importance owned by the company».

This is what the Pirelli press release reads.

THE PIRELLI SHAREHOLDERS' AGREEMENT

Pirelli recalled that the so-called "Golden Power Process" had been initiated in relation to the renewal of the shareholders' agreement signed on May 16, 2022 by China National Tire & Rubber Corporation (Cnrc), Marco Polo International Italy, Camfin and Marco Tronchetti Provera & C.

STRATEGIC TECHNOLOGIES

The Council of Ministers, explains the group led by Marco Tronchetti Provera, «in adopting the provision, considered, among other things, that the relevant technology for the purposes of decree 21/2012 represents a part of the economic activity of Pirelli and the risks associated with it require structural safeguards that are independent of the temporariness of the shareholders' agreement, as well as that any change in the corporate governance of Pirelli, including the non-renewal or stipulation of the shareholders' agreement, must be notified" pursuant to the decree on the Golden power".

THE REQUIREMENTS AGAINST CHINA

The provision ordered the imposition of specific provisions against CNRC and requires Chinese shareholders to:

  1. comply with the commitment not to exercise management and coordination activities as detailed below, by way of example and not limited to:
    – ensure full autonomy for Pirelli with regard to the management of relations with customers and suppliers;
    – guarantee that Pirelli independently prepares the strategic, industrial, financial plans and/or the budget of the Company and the Group;
    – ensure that Pirelli is not subject to instructions from the Sinochem Group;
    – not to adopt acts, resolutions or communications that may give the impression that Pirelli's decisions are the consequence of a mandatory and imperative will of CNRC;
    – not centralize treasury services or other financial assistance or coordination functions (e.g. cash pooling) or other technical coordination functions (e.g. integration of Pirelli IT systems into those of Sinochem Holdings Corporation Ltd., including those of the Chinese subsidiaries of Pirelli);
    – not to issue directives or instructions, and in any case not to coordinate initiatives, concerning decisions on financial and credit matters and on Pirelli research and development;
    – not to issue directives regarding the carrying out of extraordinary operations by Pirelli, such as, for example, quotations of financial instruments, acquisitions, disposals, concentrations, transfers, mergers, demergers, etc.;
    – not adopt decisive decisions regarding Pirelli's operating strategies or formulate group strategic directives;
    – ensure the absence of organizational-functional links between Pirelli on one side and CNRC on the other;
  2. undertake to ensure that the Chief Executive Officer of Pirelli, drawn from the majority slate, is indicated by Camfin and that, consequently, out of 12 Directors of Pirelli, drawn from the majority slate, 4 are designated by Camfin;
  3. undertake to ensure that, in analogy with the Agreement signed on August 1, 2019, the office of General Manager is introduced, to whom the power to implement the business plan, budget and ordinary management of Pirelli is delegated;
  4. undertake to ensure that all the delegated bodies of Pirelli are identified exclusively among the Directors designated by Camfin;
  5. undertake to ensure that the power to appoint and dismiss the Directors and Deputy Directors of Pirelli is deferred, pursuant to Article 11.9 of the Articles of Association of Pirelli, to the Executive Vice Chairman or the Chief Executive Officer;
  6. undertake, jointly with Pirelli, to ensure that the Articles of Association are amended in such a way that, in relation to the board resolutions relating to assets of strategic importance as well as the appointment and revocation from the office of executives with strategic responsibilities (key managers of Pirelli), the proposal is reserved to the Chief Executive Officer and any decision contrary to the same can be adopted only with the vote of at least 4/5 of the Board of Directors.

THE REQUIREMENTS TOWARDS PIRELLI

Furthermore, the imposition of the following specific prescriptions against Pirelli has been ordered:

to. ensure that the Articles of Association are amended in such a way that, in relation to the board resolutions relating to assets of strategic importance as identified above as well as the appointment and removal from the office of executives with strategic responsibilities (key managers of Pirelli), the proposal is confidential to the Chief Executive Officer and any decision contrary to the same can be adopted only with the vote of at least 4/5 of the Board of Directors.

b. refuse any request that goes beyond the normal exercise of the shareholders' prerogatives as well as to implement any managerial or organizational initiative that comes from subjects attributable to the Chinese State-owned Assets Supervision and Administration Commission of the State Council (SASAC), with particular reference to requests regarding:
– the sharing of information relating to technologies covered by industrial property rights, intellectual property or, in any case, any information relating to know-how attributable to such technologies, even if under development;
– the centralized treasury mechanism managed by Sinochem Holding Corporation Ltd.;
– direct access to the management and administrative information systems, including the Enterprise Resource Planning (ERP) platforms of Pirelli & CSpa and its subsidiaries, including the Chinese branches;
– the transfer of ICT goods, systems and services of the Companies of the Pirelli & CSpa group to infrastructures located outside the territory in which European jurisdiction applies and/or managed by subjects attributable to the Chinese Government;
– the transfer or sharing with subjects attributable to the Chinese Government of any data collected or processed through CYBER technology.

INSTRUMENTS FOR THE PROTECTION OF STRATEGIC ASSETS

"The provision with which the Presidency of the Council of Ministers exercised special powers – concludes the press release – provides Pirelli with a series of tools for the protection of strategically important assets, including a strategic industrial security clearance which sets limits accessibility to information. Furthermore, the Pirelli company will have to set up an autonomous organizational unit for safety. The implementation of the prescriptions will be monitored by the Ministry of Business and Made in Italy.

Pirelli is required to send the Ministry within thirty days of the approval of the financial statements, starting from that referring to the year 2023, a report drawn up by the Board of Statutory Auditors, which communicates the measures adopted in compliance with the decisions taken with the Provision and any other corporate or corporate measures relevant to them. The next Board of Directors of the Company will take note of the aforementioned provisions and will proceed to convene a new meeting for the renewal of the administrative body and the preparatory work for the statutory amendments prescribed by the Provision.

This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/pirelli-golde-power-testo/ on Mon, 19 Jun 2023 06:10:38 +0000.