De Benedetti Resigns As Olivetti Chairman
Sep. 03, 1996
MILAN, Italy (AP) _ Carlo De Benedetti resigned Tuesday as chairman of Olivetti and Co. SpA after big investors questioned the computer maker's strategy.
Board member Antonio Tesone was named the new chairman, the company said. Tesone for many years has been one of Olivetti's top lawyers.
De Benedetti issued a statement saying he was making good on a promise earlier this year to resign if ``the company didn't achieve positive economic results.''
De Benedetti, who has led the company since 1978, also gave up his seat on the board of directors, but was named an honorary chairman. A financier and one of Italy's most powerful industrialists, De Benedetti indirectly controls nearly 15 percent of Olivetti's stock.
The company confirmed De Benedetti's resignation in announcing a 440 billion lire loss in the first six months of 1996. A year earlier, the company lost 1.087 trillion lire, but nearly all of the loss was the result of one-time restructuring costs.
Before news of De Benedetti's resignation got out, Olivetti shares finished Tuesday's trading down more than 5 percent on a newspaper report that a number of top managers have left the company. At one point, shares were down by 7 percent.
The Italian financial daily Il Sole 24 Ore said chief financial officer Luciano La Noce, administrative director Corrado Ariaudo and investor relations head Pierpaolo Cristofori have departed.
The report follows a wholesale change in the company's top management earlier this year, most notably the exit of Corrado Passera as managing director and the arrival of Francesco Caio as his replacement.
Il Sole reported tension between Caio and De Benedetti over Olivetti's ongoing restructuring plan. Furthermore, the daily said the company's losses could be exacerbated by new reorganization moves.
Olivetti's stock losses Tuesday follow a drop of more than 3 percent in Monday's trading.
The company's most recent troubles began last week when London-based fund mangers representing at least 25 percent of the company's shares met to ask for a meeting with management to discuss strategy.
Those fund managers _ though they said they weren't asking for De Benedetti's ouster _ wanted Olivetti to clarify the group's near-term strategy. They also reportedly were pushing for Olivetti to sell its 41 percent stake in Omnitel Pronto Italia, the telecommunications company.
Analysts generally maintain that the fast growing Omnitel represents more future value than the rest of the company combined.
De Benedetti brought Olivetti through the typewriter age into the computer age, only to see the personal computer manufacturing division become a heavy drain on the company.
The financier, who is one of Italy's most powerful industrialist, will continue to have influence over the company since he indirectly controls nearly 15 percent of Olivetti's shares.
Beside Olivetti's economic woes, De Benedetti has been plagued by legal problems in the last few years.
Earlier this year, an appeals court upheld his conviction in the collapse of Banco Ambrosiano, one of Italy's largest scandals, but reduced his sentence to 4 1/2 years in prison.
De Benedetti is free pending a second appeal in the fraudulent bankruptcy case. He has denied he made any illegal profits during his 65-day tenure as deputy chairman of the bank.