VOTE ON MONTE DEI PASCHI'S FUTURE IS POSTPONED
c.2013 New York Times News Service
SIENA, Italy — The latest chapter in the saga of Monte dei Paschi di Siena, the world’s oldest bank, ended inconclusively Friday after a decision on a rescue plan was postponed amid a quarrel between top management and the bank’s largest shareholder.
A vote on when to issue new shares to raise 3 billion euros, about $4.1 billion, in cash to avoid a possible nationalization by the Italian government was postponed until Saturday, because not enough shareholders were present to achieve a quorum.
Alessandro Profumo, the chairman of the bank, which is the third-largest in Italy, said Friday that shareholders representing 49.3 percent of its share capital had showed up for a meeting in an auditorium in Siena, less than the 50 percent plus one vote needed to make a decision.
The delay came in the midst of a deadlock between Monte dei Paschi’s management and the charitable organization that is the bank’s largest shareholder.
Profumo, a veteran banker who was brought in after the bank’s problems came to light in 2012, wants to complete the share sale by the end of January. But the Monte dei Paschi Foundation — itself struggling for survival after dividend income from the bank evaporated — wants to wait until at least April in hopes of finding a buyer for some of its 33.5 percent stake.
Monte dei Paschi, founded in 1472, needs to raise the cash to repay 4.1 billion euros that it received in bailout aid from the Italian government. If the bank cannot repay the money by April, the debt to the government would convert to shares, and the bank would effectively be nationalized.
The foundation and several other large shareholders attended the meeting Friday, and it was apparently absenteeism by smaller shareholders and the diminished role of a shareholder that sold some of its stake last fall that left the gathering short of a quorum. Under Italian law, the second meeting, on Saturday, requires only one-third of shareholders to make a decision, a quota that is expected to be reached because of the foundation’s presence alone.
Some see the dispute between bank management and its largest shareholder as a clash between those who want to bring Italian banking into the 21st century and those who want to preserve ancient systems of patronage. For years, the Monte dei Paschi Foundation channeled its profit back into a wide variety of civic projects and events, including the famed bareback horse race, the Palio di Siena.