Former UniCredit SpA (UCG) Chief Executive Officer Alessandro Profumo is among 20 UniCredit and Barclays Plc (BARC) executives facing fraud charges in a tax-evasion probe led by a Milan prosecutor, according to court documents.
Prosecutor Alfredo Robledo asked a court in the city to put the 20 individuals on trial for fraudulent representation in relation to an international investment plan known as Brontos, he said in a court filing today. A judge will rule on the prosecutor’s request at a later date.
UniCredit, Italy’s largest bank, used the tax vehicle to increase the bank’s “economic benefits,” Profumo said at the company’s annual meeting in April 2010. Prosecutors have been investigating Brontos since last year when they seized 246 million euros ($321 million) in bank assets.
Profumo, 54, said in a statement today that he welcomes the chance to be heard in court and he is convinced he acted correctly. He stepped down as UniCredit CEO in September 2010.
UniCredit “reaffirms its belief” that both the bank and its current and former executives and employees acted correctly and properly, the lender said in a statement. A spokesman for Barclays in London declined to comment.
Brontos was conceived to mask interest on a deposit account into dividends earned on fictitious securities, Robledo has said in court documents. Interest earned on deposits is taxed in full while dividends are taxed at 5 percent.
UniCredit in a November appeal won the return of the assets that were seized as part of the probe, according to court documents. UniCredit “remains convinced that both it and its employees acted correctly,” the Milan-based lender said in an October statement.
Barclays used a Luxembourg unit to issue Turkish-lira securities that were purchased by its Milan branch, Robledo said in court documents. With a series of transactions involving Barclays’s London branch and the use of currency swaps, Barclays allegedly enabled UniCredit to earn interest of about 20 percent in 2007, or five times the amount it could have earned on the interbank market at the time.
Vittorio Ogliengo, UniCredit’s co-head of financing and advisory, and Barclays bankers Rupak Chandra and Stefano Filippi are among those who may go to trial, court documents show. Ogliengo, Chandra and Filippi didn’t return e-mails seeking comment.
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