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by Eric J. Lyman
ROME, Sept. 19 (Xinhua) -- The Italian government is gearing upto use its rare veto power it has over strategic private companiesamid worries that a foreign entity -- French media giant Vivendi --may have quietly amassed a controlling stake in Telecom Italia Cheap Terrell McClain Jersey , theformer Italian state telephone monopoly.
Italian law gives the government what is called a "golden share"or "golden power" to block certain developments for domesticcompanies considered strategic, such as major utilities, transportcompanies, or telecommunications. Use of the power has beenthreatened a handful of times in the past but never actuallyused.
At the center of this case is the concern that Vivendi'sinfluence with Telecom Italia has become too powerful. Vivendi's 24percent stake in the Italian company doesn't surpass any formallimits: a shareholder is only required to notify CONSOB Cheap Logan Paulsen Jersey , Italy'ssecurity regulator, once its stake in a strategic company surpasses25 percent.
But CONSOB says Vivendi has de facto control over TelecomItalia, exercising influence over the company's operations anddecision making and appointing two-thirds of the Telecom Italiaboard of directors.
"This situation is far more complex than simply determiningwhether Vivendi's stake is above or below 25 percent," RoccoPanetta Cheap Brandon Fusco Jersey , an attorney specializing in antitrust issues for Rome'sPanetta & Associati law firm, told Xinhua. "The challenge is tounderstand how Vivendi is using its influence at Telecom Italia,and that is not an easy task."
For its part, Vivendi denies wielding undue influence in TelecomItalia. The company formally notified the government of itsposition in Telecom Italia Sept. 15 Cheap Austin Hooper Jersey , but it stressed that itparticipates in only "management and coordination" at the Italiancompany.
"This notification as made voluntarily, and is something noother investor has been compelled to do before this," Vivendi saidin a statement published in the Italian media.
The stakes of the process are very high. If found guilty offailing to notify the government of having acquired a controllingstake in Telecom Italia Vivendi could face a fine of up to 300million euros (360 million U.S. dollars). It could also be forcedto take on some of Telecom Italia's 25 billion euros (30 billionU.S. dollars) in debt, or to sell some of its shares in thecompany.
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