What will happen to Saipem’s old management?
The requests for indictment by the Milan prosecutor's office for the former Saipem top management. All the details
Judicial disturbances at Saipem due to events concerning past top management
Request for indictment for Saipem, its former CEO Stefano Cao and former CFO Alberto Chiarini. According to Reuters , revealing that the preliminary hearing will start next May 10, the charges are false in prospectus and stock manipulation.
At the heart of the case is the sale of 12.5% of the company by Eni to Cassa Depositi e Prestiti. All the details.
THE REQUEST FOR REFERENCE FOR JUDGMENT
The Milan prosecutor's office, writes Reuters, "asked for the indictment of Saipem, his former CEO Stefano Cao and the former CFO Alberto Chiarini with charges of false accounting, false prospectus and manipulation in relation to the operation with which in January 2016 Eni sold 12.5% of the company to Cassa Depositi e Prestiti ".
THE PRELIMINARY HEARING
The request for indictment emerges from the documents which set the start of the preliminary hearing for 10 May. Following this, the judge will have to decide whether to send the defendants to trial or acquit them.
THE ACCUSATIONS
What are the charges? According to prosecutors Giordano Baggio, Piero Basilone and Paolo Filippini, who oversee the investigation, the top management deceived "the market, shareholders and savers by hiding the real conditions of Saipem by overestimating the economic forecasts of the 2016-2019 strategic plan in the 2015 consolidated financial statements and in the 2016 half-year report ".
And not only. Saipem would also have concealed “the status of the company in the prospectus of the capital increase up to 3.5 billion euro approved at the end of October 2015; misleading the market on the equity, economic and financial situation through seven different press releases from October 2015 to July 2016 ".
CASH SALE DEPOSITS AND LOANS
The sale of 12.5% of Saipem by Eni to Cassa Depositi e Prestiti was set at a price between € 7.40 and € 8.80 per share.
THE COLLAPSE OF SAIPEM'S STOCK
After setting the purchase price and pending the closing of the transaction in January 2016, however, the energy company announced further write-downs of 1.3 billion, with the stock falling by more than 30%.
According to the prosecutor, “these data should have been communicated as early as 2015, but the clauses of the contract on“ material adverse change ”and“ material adverse effects ”could have blown up the sale from Eni to CDP,” writes Reuters .
SAIPEM'S DEFENSE
Saipem, for its part, justifies the behavior by emphasizing that "the worsening of the extension was well known to the market". And "everything – reads the defense act – was resolved with the capital increase of Saipem with the issue of new shares for 3.2 billion, a loan of 4.7 billion to Saipem by a pool of banks, the repayment of the financial debt by Saipem to Eni for 5.5 billion euros ".
THE ADVANTAGES OF ENI
And Eni, in all this operation, drew the greatest advantages according to the Prosecutor's Office: "It was able to deconsolidate, collected 463 million and no longer had to book Saipem's debt", writes Reuters, adding that the capital increase damaged the small shareholders, the consortium of 11 banks and Cassa Depositi e Prestiti.
THE OTHER TROUBLES OF SAIPEM
Legal problems aren't the only woes for the energy company. Saipem closed the first quarter of 2021 with revenues of € 1.618 billion, down by 25.5%, missing the expectations of analysts and recording a net result of -120 million.
On the energy front, on the other hand, the Mozambique node weighs heavily . Here Total suspended the Mozambique Lng project indefinitely, considering the evolution of the security situation in the north of the province of Cabo Delgado in Mozambique, declaring the state of "force majeure".
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/cosa-succede-ai-vecchi-vertici-di-saipem/ on Wed, 05 May 2021 09:59:24 +0000.