By Giuseppe Fonte
ROME (Reuters) – Italy is seeking to increase the power of listed corporations to challenge shares with enhanced voting rights, a Treasury official mentioned on Thursday, as a part of efforts to cease a gradual flight of companies from Milan to the Netherlands.
Such an choice, nonetheless, can be thought-about so long as it’s accompanied by provisions to ensure the rights of small traders who share possession with extra highly effective shareholders, Treasury Junior Minister Federico Freni advised Reuters.
A regulatory set-up that helps main shareholders protect a good grip on corporations has not too long ago pushed a number of Italian corporations to go for a Dutch authorized domicile and even itemizing in Amsterdam.
“Many stakeholders are calling for a stronger set of measures to permit long-term shareholders in listed corporations to extend their voting energy over time. We’re wanting into it,” Freni mentioned.
Prime Minister Giorgia Meloni’s authorities in April offered to parliament a invoice that, amongst a spread of measures to encourage itemizing, enhanced the suitable to challenge multiple-voting shares however restricted that choice to the pre-IPO stage.
Consequently, listed corporations can solely faucet a so-called “loyalty share scheme” which confers a most of two voting rights to long-standing shareholders of no less than 24 months.
Freni mentioned the ruling coalition might reinforce the loyalty regime with extra measures to assist the Milan inventory change compete with European friends.
“A dynamic and environment friendly capital market is a key issue to spice up Italy’s financial development at a time when increased rates of interest are making banking credit score more and more pricey,” he mentioned.
Some lawmakers are proposing to undertake in Italy a French regulation relationship again to 2014 that made enhanced voting rights a default choice, except shareholders in an organization voted to choose out of it.
However Freni disagrees with such regulatory setting arguing that shareholders have to have a say on whether or not to distinguish voting energy, versus solely voting in opposition to what would turn out to be the default choice.
The Treasury official additionally urged warning on parliamentary calls to curb a governance association whereby the outgoing board places ahead an inventory of candidates to call new administrators.
Final month businessman Francesco Gaetano Caltagirone, a insurgent investor in Generali (BIT:), advised a parliamentary listening to that set-up has allowed funding financial institution Mediobanca (OTC:) to excessively affect the insurer.
“We don’t see any urgency to take motion on this challenge,” Freni mentioned.