TIM pleads innocence after office raided by Italian finance police

TIM issued a couple of press releases on the matter yesterday. The first, in the morning, said: “TIM confirms that earlier this morning the Guardia di Finanza (Italian Finance Police) executed a search warrant at the office of one of its managers for the hypothesis of bribery between private individuals. The company will also cooperate with the investigators in order to determine any possible liability to the detriment of the company.”

By late evening, TIM had a better idea of what all the fuss was about. “The Board of Directors, as already expressed by the Company this morning, guarantees absolute cooperation with the investigating Authorities, also with the aim of reconstructing possible responsibilities to the detriment of the Group, which is to be considered an uninvolved and injured party in the affair,” said the second release. “In this context, the Company had already launched specific audit activities in light of the press rumors on the so-called Sogei affair.

“The Board also took note of the suspension of Simone De Rose from his current position and of the appointment of Giampaolo Leone as new Group Procurement & Logistics Officer. Leone, previously Chief of the Compliance Department and holder of 246,755 TIM ordinary shares, qualifies as an executive with strategic responsibilities. The Compliance Department is assigned ad interim to Massimiliano Turconi, who retains the responsibility for the Audit Department.”

So it seems safe to assume that De Rose is the manager mentioned in the first release, especially after reading Reuters’ coverage of the matter. “In a search warrant seen by Reuters, Rome prosecutors alleged that Simone De Rose received, "in the context of a corrupt relationship between private individuals", 50,000 euros ($53,875) from an NTT Data Italia manager,” reports Reuters

The Sogei affair seems unrelated to this specific case and concerns the Società Generale d'Informatica, which is a state-owned IT company. Agenzia Nova reports that the Guardia di Finanza is having a busy month, investigating 18 individuals and 14 companies on suspicion of corruption and bid-rigging to do with Sogei.

TIM’s share price (Borsa Italiana listing: TIT) took a bit of a hit on the news, but its board seems confident that this investigation will be limited to De Rose and that the rest of the company will be insulated from the scandal. This is still an evolving matter, however, and Reuters reports that another TIM Employee is implicated. If that number continues to grow, the board room will be an increasingly nervous place.