Caio Resigns as Olivetti Chief Shortly After Gaining Control
Sep. 18, 1996
MILAN, Italy (AP) _ Olivetti SpA chief Francesco Caio resigned Wednesday, fresh of a victory for control of the company that was quickly overshadowed by an embarrassing investigation and fading support from directors.
His departure comes two weeks after winning a battle for the money-losing computer and telecommunications group with longtime chairman Carlo De Benedetti.
Caio stepped down only three months after being appointed, as the company struggled with a severe crisis that saw its shares plummet to record lows while magistrates opened an investigation into allegedly misleading first-half financial reports.
A company statement said Caio and the newly-appointed executive committee of the board could not reach an agreement on Caio's powers.
Caio, 39, who previously ran Olivetti's cellular phone unit Omnitel, shook up Olivetti's top management after taking over and said he would seek out partners for its money losing personal-computer business while focusing on telecommunications.
Caio was placed under investigation this week along with Benedetti and his successor as chairman, Antonio Tesone. Analysts said the investigations impaired Caio's efforts to regain investors' faith in the company.
Roberto Colaninno, an executive from De Benedetti's holding company CIR, was named to succeed Caio as managing director.
Caio and De Benedetti had waged a tense battle over Olivetti's ongoing restructuring plan, and De Benedetti was forced to resign Sept. 3 as big investors questioned his strategy for the company.
De Benedetti, who led the company since 1978, still indirectly controls nearly 15 percent of Olivetti's stock.
On the day he resigned, Olivetti reported a loss of 440 billion lire ($262 million) in the first six months of the year. A year earlier, the company lost 1.087 trillion lire.
Director general Renzo Francesconi resigned shortly after the results were released and suggested that Olivetti's actual financial situation could be even worse.
Olivetti shares had plunged to a record low of 465 lire on Tuesday following repeated suspensions. But the stock jumped 10 percent Wednesday after the company confirmed it had scheduled a board meeting amid reports that Caio would resign.