Italy’s financial police searched the offices of UnipolSai Assicurazioni SpA, the country’s No. 2 insurer, as part of a probe related to its merger with Fondiaria-SAI SpA.
The investigation is tied to last year’s combination of Unipol with insurer Fondiaria-SAI SpA, Fondiaria’s parent company, Premafin Finanziaria SpA, and the unit Milano Assicurazioni SpA, the insurer said in a statement today, confirming earlier press reports.
Unipol is confident that the investigation will confirm “the absolute correctness and transparency of the actions of the group and of its representatives,” the company said. “The company reserves the right to make all appropriate evaluations for its own protection and that of its shareholders.”
The searches in Bologna at UnipolSai’s headquarters are related to a probe by Milan prosecutors into alleged market manipulation involving Chief Executive officer Carlo Cimbri and other directors, said a person with knowledge of the situation, who asked not to be identified because the investigation isn’t public.
“This news, if confirmed, will hurt the insurer and the stock,” said Giuseppe Belfiori, head of research at FT Support, an advisory firm in Milan. “The merger with Fondiaria was the starting point for its restructuring and to cut the ties with the previous non-transparent management. Now the turnaround is at risk.”
UnipolSai dropped 3.8 percent to 2.28 euros in Milan today, while its parent company Unipol Gruppo Finanziario SpA fell 7.3 percent to 4.17 euros.
Cimbri agreed to a four-way merger in 2012 as part of a plan to rescue unprofitable Fondiaria, which was engulfed in probes of alleged misconduct by former managers at the time.