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Caltagirone, a major MPS investor, says that there was no conflict with Lovaglio as CEO

Grouppo Caltagirone is a major shareholder in Monte Dei Paschi di Siena. It said that speculations about a conflict with?CEO Luigi Lovaglio were misplaced. The board was simply discussing the bank's governance and strategy.

Lovaglio, 70, last year led Monte dei Paschi (MPS) to acquire bigger rival Mediobanca as consolidation swept Italy's banking sector.

This deal increased the influence of two key investors: Francesco Gaetano Caltagirone, the construction tycoon and Delfin Holdings, the holding company of Del Vecchio Family. Both are major MPS investors, and they also own stakes in Italy's biggest insurer Generali.

Bankers believe that with MPS at the core of Italy's finance system, the future of the sector will depend on the decisions made about its leadership.

Lovaglio wants a new mandate from the MPS Board?in April. However, several sources have said in recent months that the situation is complicated by a probe being conducted by the Milan prosecutors into the Mediobanca case.

MPS has given its full support to the CEO who is being investigated along with Caltagirone Chairman Francesco Milleri and Delfin Chairman Francesco Milleri over an alleged secret agreement to control Mediobanca through MPS.

The three parties have all denied wrongdoing, and the Italian market regulator has ruled out an unreported agreement.

Grouppo Caltagirone commented on Friday, in response to a Financial Times article about a conflict between MPS CEO and Caltagirone. They said that a debate within the company over a strategic planning?requested by regulators? and board renewal shouldn't be interpreted as a reflection of the role played by a large shareholder.

It said that "linking this boardroom conversation to the role played by a major shareholder or Mediobanca’s stake in Generali is an opportunistic interpretation."

Delfin, which backed Lovaglio on Friday, said it was in support of the bank's management and that it had no plans to sell its MPS shares at this time.

Delfin holds 17.5% and Caltagirone 10% of MPS. They joined as Italy, who rescued MPS by acquiring a 68% share in 2017, reduced its holding to below 5%.

Alessandro Caltagirone, son of Caltagirone and Elena De Simone - a director for Caltagirone SpA - were appointed to the board after the Treasury reduced their stake. Reporting by Valentina Z and Giuseppe Fonte. Jane Merriman edited the article.

(source: Reuters)