Telecom Italia (TIM) has announced that a meeting of its board of directors resolved to “take every legal action” to challenge a decision by statutory auditors to supplement the agenda of the upcoming Annual Shareholders’ Meeting to be held on 24 April with a motion proposed by activist fund Elliott to replace six Vivendi-nominated board members. Describing the decision as unlawful, TIM said “statutory auditors can only intervene in a situation of “inertia” (inactivity) of the administrative body in granting the supplementation request made by the shareholders and not in a situation where there is a justified decision which the Board of Statutory Auditors does not agree with,” which it said was the case in this particular instance.
As a result, TIM said its board had decided by a majority vote to formally disassociate itself from the auditors’ decision, which it considered “erroneous and particularly serious” and would request a probe into the matter from Italian market regulator Consob as well as taking its own legal action.
Elliott’s request for board changes resulted in eight Vivendi-nominated board members resigning a week later, triggering a vote on a full board renewal at another shareholder meeting called for 04 May. That move was described by Elliott as “a cynical and self-serving attempt to suppress shareholder democracy,” with the fund adding that Consob was already investigating the action. The fund believes there will be no need to choose a new board in May if its candidates are elected in April.
In its latest statement, however, TIM confirmed its position that Elliott’s proposal for a vote on 24 April was “superseded” by the call for a full renewal of the board of directors on 04 May.
