November 13, 2018 / 9:26 AM / a month ago

Telecom Italia ousts CEO in boardroom tussle

(Reuters) - Italian phone group Telecom Italia (TIM) sacked Chief Executive Amos Genish while he was away on business in Asia on Tuesday, ousting a man viewed by some directors as an obstacle to their campaign for a more aggressive shake-up at the company.

FILE PHOTO: Telecom Italia CEO Amos Genish , Italy November 10, 2017. REUTERS/Remo Casilli/File Photo

Genish was appointed last year to run the underperforming former monopoly by TIM’s then controlling shareholder, French media group Vivendi, but since then directors backed by activist fund Elliott have wrested control of the board. Telecom Italia said in a statement that it would meet on Sunday to appoint a new chief executive. It gave no explanation for the abrupt departure which Genish condemned as a Soviet-style putsch.

Speaking a few hours after the board stripped him of his executive powers, Genish told Reuters that the environment inside TIM was dysfunctional and that several directors had been campaigning against him for months.

Genish, who was born in Israel, said he was concerned about the future of the company and wanted to remain on the board.

“I personally will and am committed to do anything to fight and defend the rights of all shareholders from my position as a board member.

“I don’t know why people always refer to me as a Vivendi guy because I want what’s best for all shareholders,” he added.

BOARD TENSIONS

Former FiatChrysler executive Alfredo Altavilla is seen as a leading candidate to replace Genish and is currently on the board as an independent director.

Luigi Gubitosi, who previously ran the Wind telecoms business in Italy and is also on the Telecom board is seen as another candidate, along with Stefano De Angelis the former head of the company’s Brazilian business.

Genish had been pursuing a three-year turnaround plan, focusing on a digital transformation and fixing TIM’s finances, but sources say some Elliott directors wanted him to put higher priority on a possible spin-off of its fixed-line networks.

Elliott pulled off a boardroom coup in May when it secured two thirds of the seats on the Telecom Italia board after a shareholder vote.

Vivendi reacted angrily to what it called a mean and cynical maneuver by some board members who moved secretly against Genish, convening the board while he was overseas on business.

“We decry, we condemn the destabilization behind this decision and the disgraceful methods. We reserve all our rights to defend all shareholders interests,” a Vivendi spokesman said.

Elliott responded by saying that Vivendi had rebuffed previous attempts at dialogue.

“We are open, and remain open, to a dialogue between us as shareholders of TIM,” an Elliott spokeswoman said.

On Monday, Genish said in a statement he supported the idea of merging TIM’s fixed-line assets with the broadband network being developed by smaller rival Open Fiber, provided TIM was in control of the combined network.

Italy is preparing legislation that could lead to such a merger, sources close to the matter have said.

Chairman Fulvio Conti will hold the chief executive’s powers until the board meets again on Sunday to appoint a new CEO.

Tuesday’s meeting was convened while Genish was visiting South Korea. He joined the meeting by phone, said a source familiar with the matter.

TIM shares fell around 1 percent after the company statement but quickly recovered ground.

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