The Telegraph
Since 1st March, 1999
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Fiat board may quit en bloc

Milan, Dec. 12 (AFP): All of the directors on Fiat’s board could resign at a company’s board meeting on the struggling group’s future, Italian business newspaper Il Sole 24 Ore reported today without giving its sources.

The group’s chief executive Gabriele Galateri already gave his resignation on Tuesday during a board meeting. “It now seems more than probable that chairman Paolo Fresco will also leave the group,” the newspaper said.

Fresco vowed on Wednesday he would not resign immediately as Italy’s most influential business and political powers battled for control at the loss-making industrial group.

Fresco said he would retire next July but he had no plans to quit this week as was expected after waves of public criticism, including from Prime Minister Silvio Berlusconi. “Pretty much everyone is seriously trying to stop us from making it. From the first day of Fiat’s crisis we’ve been in a circus...a veritable lynching of the company,” Fresco told La Repubblica daily, branding Berlusconi “mad”.

Il Sole 24 Ore said board members close to Fresco, including ex-GE head, Jack Welsh, could also resign. Fiat said a board meeting has been scheduled for Friday to examine director resignations and nominations, new top management, and to call a shareholder meeting.

Sources say Fiat’s controlling Agnelli family and investment bank Mediobanca — which has business ties to Berlusconi — have cooked up a plan that could scupper the “put” and keep the Italian icon out of US hands. The sources have said the plan involves shifting the sporty Alfa Romeo brand out of Fiat Auto and into Fiat’s Ferrari-Maserati group — 34 per cent owned by Mediobanca —to create a new luxury car unit, possibly with partners such as Volkswagen AG.

The Agnelli family wants Enrico Bondi, current head of insurer Sai and a former executive at holding firm Montedison, to join the company’s management, the newspaper said.

However, Fiat’s four big Italian creditor banks — Sanpaolo Imi, Capitalia, Intesabci and Unicredito Italiano — are opposed to the nomination of Bondi, because he has close links to Mediobanca. Bondi is touted to be named as Fiat’s new CEO at the board meeting.

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