Sinochem executives on Pirelli board may be in breach of Italian rules

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MILAN (Reuters) – Italy is checking whether the presence of Sinochem executives on Pirelli’s board is in breach of measures Rome imposed to protect the tyremaker’s autonomy, a senior government official said.

The Italian government can use so-called “golden powers” to shield companies deemed as strategic from foreign influence or takeovers.

Italy last year took steps to curb the influence of China’s state-owned Sinochem, which holds a 37% stake in Pirelli, including a mandatory qualified majority for strategic decisions made by the board.

“If there are prescriptions and non-compliance is verified, the prescriptions are followed by sanctions,” Cabinet Undersecretary Alfredo Mantovano said on Friday.

“Rome’s prescriptions require a non-foreign presence in the management of sensitive information. Now the issue is whether this type of caution has been observed,” Mantovano – a close aide to Prime Minister Giorgia Meloni – told reporters on the sidelines of an event in Milan.

Pirelli said earlier this week that Italy was investigating a possible breach by Sinochem of the government provisions.

Rome’s move comes against a backdrop of rising trade tensions between Beijing and the European Union, which has just imposed new tariffs of up to 45.3% on Chinese-built electric vehicles.

Pirelli’s second largest shareholder, with a 25.7% stake, is Camfin, the vehicle of Italian businessman Marco Tronchetti Provera, who has been in charge of Pirelli since 1992 and now holds the role of executive vice chairman.