Soon after the offer was launched, a letter from the Bank of Italy to Banca Popolare Italiana, BPI (known as Banca Popolare di Lodi until last June) became public knowledge.
Unknown to ABN AMRO when it approached the central bank, BPI had already been authorised to increase its stake in Antonveneta and it was authorised to raise it to 29.9% on April 12. Only on April 27 was ABN AMRO allowed to take its shareholding to the same level.
When Antonveneta’s shareholders met in Lodi, a town near Milan, on April 30, the Dutch bank found that it had been out-manoeuvred. Top executives at BPI had been implementing a scheme to seize control of Antonveneta. BPI had entered into a hidden shareholders’ agreement in November 2004 and friendly investors, using finance provided by BPI, had accumulated more than 22% of Antonveneta’s share capital by February 2005.
Since regulators were not playing the role that they should have, investigating magistrates in Milan became involved and authorised telephone taps. Monday July 25 was the day things really turned sour for Mr Fiorani when, three days after ABN AMRO’s bid expired and two days before a meeting of Antonveneta’s shareholders, magistrates sequestered the Antonveneta shares held by BPI and its allies. A Milanese judge suspended Mr Fiorani from office on August 2.
Conversations to which magistrates had listened would also cause BPI’s bid to be blocked and, eventually, ABN AMRO was allowed to take over Antonveneta. “I have just put my signature to it,” Mr Fazio had told Mr Fiorani over a tapped line, soon after midnight on July 12, letting BPI’s managing director know that he had signed the central bank’s approval for BPI’s
bid.
“Tonino [Fazio]... I am overcome... thank you... thank you... I have goose-pimples... Tonino, I would like to kiss you on the forehead right now...,” Mr Fiorani had replied.
By early September, Mr Fiorani’s position as BPI’s managing director had become untenable. On September 14, with its shares in Antonveneta still sequestered and under pressure from magistrates, BPI’s board decided that the shares should be sold to ABN AMRO. Mr Fiorani resigned on September 16.
The magistrates continued digging and a Milanese judge signed a warrant for Mr Fiorani’s arrest on December 13. The judge had found unequivocal evidence of “the existence over a period of years of a stable, rooted and structured organisation in Italy and abroad... constantly addicted to pillaging the BPI’s resources by means of various and complex operations,” read the warrants.
The amount that had been misappropriated exceeded several hundred million euros. Mr Fiorani was the “real promoter and organiser of the gang”, the judge said. He still had about e70m, “with corresponding damage to the bank and its medium and, above all, small savers.”
Mr Fazio’s position was also sliding. His favouring of BPI’s claims to Antonveneta over ABN AMRO’s in the spring had brought criticism, and caught the attention of the European competition commissioner. Calls for Mr Fazio’s resignation became incessant when his telephone call to Mr Fiorani became known. At the end of September, the fact that Mr Fazio had for two months been under investigation in Rome for alleged abuse of office came out into the open. Despite the European Central Bank’s growing concern, he clung on. But two days after Mr Fiorani’s arrest, the news broke that Mr Fazio was under investigation by magistrates in Milan for insider trading and he resigned on December 19.
“The decision, taken freely with a tranquil conscience, aims at bringing serenity once again, in the over-riding interest of the country and the Bank of Italy,” said a statement from the central bank.
Mr Fazio had served the bank for 45 years, dedicated entirely to the institution, and had been a driving force in economic research. Mr Fazio had been unceasing “in promoting national interests, in accordance with European interests, in respect for the law and with the instruments allowed by the regulations.” He insists he has done nothing wrong.
