(Adds more details from court)
MILAN Dec 2 Italy's top administrative court on
Friday dealt a potentially big blow to a landmark government
reform that forced large cooperative banks to become joint-stock
companies, saying that some aspects of the reform may be
The reform, aimed at improving the banks' governance and
encouraging mergers, gave Italy's 10 largest "popolari" banks
until the end of this year to shed their cooperative status.
Eight banks have already approved their transformation into
joint stock companies. Popolare di Sondrio and
Popolare di Bari were planning to do so this month.
The court said in a statement it was suspending certain
elements of the reform pending a ruling by the constitutional
court on the legitimacy of the new rules.
The court took issue in particular with a Bank of Italy
regulation that allowed the banks to limit or even scrap the
cash reimbursement of shareholders who opposed the reform and
exercised a withdrawal right.
This was meant to prevent the capital base of the banks in
question from taking a big hit if a lot of shareholders demanded
to be reimbursed.
However, the court said limiting the reimbursement of
withdrawal rights might violate the constitution.
It was not immediately clear to what extent the ruling might
affect the reform.
(Reporting by Valentina Za and Andrea Mandala; Editing by