Vivendi: Telecom Italia Auditors' Report Reveals Governance Irregularities - Update

(Adds Elliott comments, background)

 
   By Pietro Lombardi 
 

Vivendi SA (VIV.FR) says it is "extremely concerned" by a report from Telecom Italia SpA's (TIT.MI) auditors that it says confirms the existence of serious irregularities related to the governance of the company and its board of directors.

The comments come ahead of a March 29 meeting at which Telecom Italia shareholders will vote on a proposal to remove five board members backed by Elliott Management Corp.

"This report reveals that the chairman of the TIM board violated corporate laws as well as the most basic, fundamental governance rules," the French company said late Friday.

The report shows there is a "shadow board of directors," including only members nominated by Elliott, as well as "a dissemination of privileged information to third parties prior to a board meeting," the media company said.

"These concerns reinforce Vivendi's belief that TIM shareholders must put in place a truly independent board at the March 29 shareholders' meeting."

Vivendi has been seeking to replace five board members supported by Elliott with independent directors.

Elliott said Monday that Vivendi's nominees are "unsupportable [and] lack true independence, and would simply return control to a group with demonstrable conflicts of interest, related-party transactions and a history of undermining TIM shareholders."

Vivendi is Telecom Italia's largest shareholder, with a stake of almost 24%. It has been locked in a long-running battle for control of the company with activist investor Elliott Management, whose nominees form a majority on the Italian company's board.

Read more about the imbroglio surrounding Telecom Italia at https://on.wsj.com/2TlJwWy (WSJ paywall) or https://bit.ly/2KuPhKY (NewsPlus).

Write to Pietro Lombardi at [e-mail]

(END) Dow Jones Newswires

March 11, 2019 04:35 ET (08:35 GMT)

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