Vivendi wants Italian operator TIM to have a special meeting to choose new board members, but its auditors don’t agree.

The request was originally made by Vivendi at the end of last year, in apparent response to Amos Genish but essentially a delayed reaction to it losing control of the TIM board to activist investor group Elliott earlier in the year. Elliott is understandably less keen on having such a meeting and Vivendi isn’t happy at what it perceives as breaches of corporate due process.

In a somewhat convoluted and legalese press release TIM’s board of statutory auditors said it has been thinking about Vivendi’s request but it’s not convinced a special meeting before the scheduled AGM at the end of March is required.

“This Board has evaluated the procedure that led the Company’s Board of Directors to call a Meeting of Shareholders for the coming 29 March, the agenda for which includes the same matters that Vivendi had asked be discussed separately,” said the PR.

“Following that evaluation, and on the basis of the information available, in relation to the Board’s decision we consider that the conditions for the exercise of the powers to convene a specific meeting pursuant to Art. 2367 have not been met;

“This Board reserves the right to review its opinion about the calling of a Meeting of Shareholders, should the results of the investigation into the events reported by Vivendi reveal any new information or situations that were previously not considered.”

As indicated by the last paragraph, the auditors are still looking into Vivendi’s request, but it seems to have made up its mind. Vivendi hasn’t published a response to this decision yet, but it’s hard to see what else it can do to impose its will on the company it once seemed to completely control.

In related news last week Elliott dropped some more cash to increase its stake in TIM. “The Reporting Persons believe the securities of the Issuer are undervalued and represent an attractive investment opportunity,” said the filing. “Accordingly, the Reporting Persons have increased their beneficial ownership of the Issuer from their last reported 13D filing on April 9, 2018 from 8.8% to 9.4%.

“The Reporting Persons believe that there are several pathways for the Issuer to enhance shareholder value, including but not limited to, the separation of its fixed line access network (NetCo) and the evaluation of market consolidation options, as well as the conversion of the saving shares. The Reporting Persons believe any change in composition of the Board at this juncture would be detrimental to the execution and delivery of the Issuer’s anticipated value creation plans.”

In response to this move a Vivendi spokesperson said: “Elliott is acting as a pure financial investor, that is to say, using an opportunistic approach to take advantage of the 45% drop in the share price. The share price is currently so low because of Elliott’s own terrible governance since May 4. There is currently no industrial plan.”