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23 Nov 11. Pressure mounted on Finmeccanica Chairman Pier Francesco
Guarguaglini to quit on Wednesday over a corruption probe that has engulfed Italy’s defense conglomerate and exposed a growing rift in the company’s top ranks. The defense group, controlled by Italy’s Treasury, is involved in a long-running probe centering on accusations of false invoices and slush funds that were allegedly used to bribe politicians.
Guarguaglini and his wife Marina Grossi, who is chief executive of Finmeccanica subsidiary Selex Sistemi Integrati, are both under investigation as part of the probe. Both deny any wrongdoing, but with new allegations leaked to newspapers on a daily basis, the case has grown into the first big test for Italy’s new Prime Minister Mario Monti, who is also finance minister and as such is responsible for the state’s 30 percent stake in Finmeccanica. (Source: Reuters)

22 Nov 11. Finmeccanica SpA’s embattled chairman Tuesday denied using illicit funds to pay off politicians, as a widening investigation into kickbacks, bribes and other payments involving the civil aviation authority has embroiled the defense and aerospace group as well as members of Italy’s political class. The investigation led to the weekend arrest of the head of the authority, Enav, and a director at a Finmeccanica division called Selex Sistemi Integrati, which specializes in radars and surveillance systems. It has also seen another Finmeccanica director resign and, according to reports in major newspapers such as la Repubblica, agree to collaborate with investigators. Politicians have been quick to deny any involvement in the scheme that news reports say siphoned millions of euros from Enav by inflating the value of contracts the authority gave out to Selex and third parties. The centrist Union of the Centre, or UDC, party denied any wrongdoing following reports its treasury received €200,000 ($269,800). Since Finmeccanica is 32.44% owned by the Italian state, the new emergency government led by Mario Monti is seen by the local press as eventually being called to respond to the scandal. Based in Rome, Finmeccanica is known for its AgustaWestland helicopter division, which worked in the past with Lockheed Martin Corp on the U.S. presidential helicopter. The investigation is one of several in which Finmeccanica —also a supplier to Boeing Co.— is embroiled, as it tries to carry out a major restructuring to become more efficient, improve its performance, sell off up to €1bn in assets and pay down its debt in the market downturn. Both Finmeccanica Chairman Pier Francesco Guarguaglini and his wife, Marina Grossi, who heads the Selex division, are under investigation in one case or another, but they have denied any wrongdoing and haven’t been charged with any crime. In a terse statement regarding the latest scandal Tuesday, Mr. Guarguaglini vowed he had “never created illegal funds nor … paid or ordered anyone to pay money to politicians or political parties.” He and his wife’s steadfastness highlights a struggle over the future direction of the group between them and Giuseppe Orsi, Finmeccanica’s new chief executive. (Source: WSJ)

21 Nov 11. Finmeccanica shares fall as corruption probe widens. A widening corruption investigation involving Finmeccanica sent shares in the Italian defence and industrial conglomerate down to new 13-year lows on Monday morning. Finmeccanica fell more than 6 per cent by afternoon trading in Milan to €3.01, having lost about a third of its value since announcing last week that it expected to make a €200m loss this year because of the global economic downturn. Lorenzo Borgogni, Finmeccanica’s director of external relations, decided to step down on Sunday after press reports that he was the subject of an investigation involving Finmeccanica, its Selex Sistemi Integrati subsidiary and Enav, the state-owned civilian air traffic controller. Finmeccanica, in which Italy’s Treasury has a controlling 30 per cent stake, said on

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