Banca Popolare di Milano Scrl fell to the lowest in more than four months after former Chairman Massimo Ponzellini was placed under house arrest as part of a probe into transactions of Italy’s oldest cooperative bank.
The stock fell as much as 12 percent to 29.4 cents, the lowest since Jan. 16, making it the worst performer on Italy’s benchmark FTSE MIB Index. Pop. Milano traded down 3.1 percent at 32.3 cents at 4:19 p.m., giving the bank a market value of about 1 billion euros ($1.3 billion).
The investigation, conducted by prosecutors in Milan, is focused on bribes of 5.7 million euros that the bank’s executives allegedly received after granting financing to several firms, Italian financial police in Milan said in a statement today. Ponzellini, who was chairman of Pop. Milano until October 2011, is accused of corruption, money laundering and criminal association, a financial police official in Milan said by phone.
“I don’t think the probe can affect the bank’s performance,” said Vanni Lucchelli, a partner at Compagnia Fiduciaria Lombarda SpA in Milan. “The news confirms the lack of transparency and the poor governance of previous management.”
Pop. Milano sees no financial impact from the probe, it said in a statement. The lender said it is a damaged party in the investigation and is cooperating with authorities.
A spokesman for Ponzellini, who is also chairman of Impregilo SpA, didn’t return two calls seeking comment. A Pop. Milano spokesman declined to comment.