the government tightens on the golden power – Corriere.it

The level of attention of the executive on the relationship between the Chinese government and Pirelli, of which the Beijing conglomerate, Sinochem, majority shareholder, is increasing. A hitherto silent shareholder — the alliance between the Bicocca group and the Chinese shareholders dates back to 2015 — who suddenly changed his attitude by questioning the balance of power defined by the Pirelli governance rules, with the intention of strengthening the on one of the best-known made in Italy industrial groups in the world. Today the coordination committee for the golden power of the Prime Minister will hear the vice president and CEO of Pirelli Marco Tronchetti Provera in hearing (as number one of Camfin, first Italian shareholder of Bicocca)assisted by the jurist Andrea Zoppini and the Chiomenti law firm, and a group of Pirelli managers led by the general manager of operations, Andrea Casalucci and accompanied by the lawyers of Legance, to have a clearer picture of what is happening and the ways in which Sinochem is trying to strengthen its influence on the Bicocca group. The appointment of the CEO, indicated today by Camfin, is one of the points under discussion. The committee has put together a substantial dossier which includes papers, letters and documents exchanged between Sinochem and Pirelli, part of which was told over the weekend by Messengerwho spoke of official letters from Beijing asking to implement the guidelines indicated by the premier and secretary of the Communist Party Xi Jinping for investee companies or to migrate Pirelli’s operating systems to Sinochem’s IT platform.

The question on which the application of the golden power is concerned also concerns the internet of things, since Pirelli tires communicate via chips with the computers on board the cars. In April, the Palazzo Chigi committee had audited Cnrc, a company of the ChemChina/Sinochem group (37% of Bicocca through the Marco Polo vehicle); to respond to requests for clarification on governance, the general counsel of CNRC had landed from Beijing with other institutional representatives. In the coming days, third parties will also be heard for further technical clarifications, a bit like what happened with the Whirlpool case when the Cnr was heard. In addition to being the leading Italian shareholder, Camfin represents, in contrast to the Chinese, the market in the broadest sense: damage to Pirelli would damage all investors. Today Pirelli travels on the 435 million profit while in 2015 it was at a loss. After the April hearing, however, talks began between the Chinese and the government, which would have led to the presentation of possible remedies by Sinochem.

Sources close to the dossier hope that a clear path will be taken for the orderly exit of Sinochem from Bicocca, given that a shareholder with 37% of the capital cannot be frozen: the hypothesis could see the entry of new shareholders such as the CDP or the strengthening of the current ones through the repurchase of shares. In fact, it should be remembered that Camfin also counts Intesa and Unicredit within its 14% stake in Pirelli and that in March it entered into a shareholders’ agreement with Brembo to bind more than 20% of the tire manufacturer’s share capital for the next three years. Increasing the size of Pirelli would dilute the Chinese and could push them to an even financially easier exit, keeping the governance in the hands of the current Italian majority shareholder, Camfin. The story of Pirelli intersects with the delicate relations between Italy and China – in days the government should make a decision on the Silk Road agreement signed by the Conte government – ​​and the industrial repercussions that the Chinese presence in Pirelli could have at an international level. Already today, due to the duties on Chinese goods, Pirelli has stopped exporting tires produced in China to the USA, and there is the risk that new sanctions could have a further impact on relevant markets, such as for example Asia, where various countries could decide to raise barriers to products made in Beijing.