Telecom Italia says board fully backs chairman

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By Reuters
Telecom Italia says board fully backs chairman
FILE PHOTO: Enel SpA CEO Fulvio Conti poses for photographers during the opening of an Enel flagship store in downtown Milan May 10, 2011. REUTERS/Alessandro Garofalo   -  Copyright  Alessandro Garofalo(Reuters)

MILAN (Reuters) – Telecom Italia’s board on Thursday backed Chairman Fulvio Conti, who is embroiled in a row with the company’s top investor, French media group Vivendi.

Conti had been accused by Vivendi of violating corporate and governance rules by siding with rival investor and activist fund Elliott.

A board meeting was held on Thursday to respond to a report by TIM’s auditors, which found irregularities in the way information was shared with the company’s board members in the run-up to the ousting of former Chief Executive Amos Genish.

The auditors said last week that contrary to a statement by Conti some information was only shared with board members appointed by Elliott before being brought to the attention of the whole board.

But the company said in a statement after the board meeting there was no reason to doubt Conti’s independence.

“The board therefore reiterates its full confidence in the

work of the Chairman,” TIM said in a statement.

Vivendi, which owns 24 percent of TIM, is seeking the removal of Conti and four other board members, citing a “substantial lack of independence and disrespect for the most basic and fundamental corporate governance rules”.

TIM’s shareholders will vote on the proposals on March 29.

The French media group has alleged that the five board members conspired to replace Genish, a former Vivendi executive.

Before the company’s statement came out, Genish – who still sits on TIM’s board – was asked by reporters doorstepping the board meeting whether Conti was stepping down. “I wish,” he replied.

Elliott, which holds just under 10 percent of TIM, wrested board control from Vivendi in May by appointing 10 candidates – two-thirds of the total – to its board after accusing the French investor of serving its own interests.

Three proxy advisers have recommended that investors vote against Vivendi’s proposals.

(Reporting by Silvia Aloisi and Alberto Sisto; Editing by Alexandra Hudson)