ITALIAN regulators have fined the Agnelli family's holding company and suspended three senior business people for misleading the market in share dealings relating to Fiat.
The family founded Fiat, the industrial group best known for its cars, over 100 years ago, and they still own 30 per cent of the company.
In 2005, a complicated trade involving contracts with Merrill Lynch enabled Ifil, the Agnelli holding company, to retain its 30 per cent of Fiat, despite banks in the same period converting billions of euros of debt owed to them by Fiat into equity in the company.
However, regulators have been investigating communications by the companies involved, on suspicion that investors had been misled about the existence and content of the share contracts with Merrill Lynch.
Consob, Italy's market regulator, which in the past couple of years has been taking a more aggressive attitude to alleged wrongdoing, in February last year sent its notes on the case to criminal authorities.
The criminal investigations are still continuing in Turin, where Fiat is based. On Tuesday, Consob concluded the civil part of the case, fining Ifil, a related company and some directors a total of E16 million ($26.7 million).
Gianluigi Gabetti, Ifil's chairman, and two other senior business people, Virgilio Marrone and Franzo Grande Stevens, were suspended from holding posts in public companies for between two and six months.
Mr Grande Stevens last year resigned, with the rest of the board,
as chairman of Juventus, the football club controlled by the Agnellis, which was sent down a division for its part in a match-fixing scandal.:wth:
Ifil said it would appeal against the sanctions and would ask Consob if it was required to delay suspending the executives while the appeal is pending.
John Elkann, who is vice-chairman of Ifil and whose grandfather, Gianni Agnelli, is credited with building Fiat into a global and famous company, said:
"We believe that the transaction effected by Ifil in 2005 was conducted with full respect for the law and without any manipulation of the market.:angry2:
"As affirmed on various occasions, this transaction was intended to maintain Ifil's role as the stockholder of reference of Fiat so that it would be assured of the stability necessary to successfully achieve its turnaround."
Fiat's fortunes have revived substantially since 2005. The deal with Merrill allowed the Agnellis to buy more than 80 million Fiat shares at E6.50. On Tuesday they were trading at E17.20.:depressed
The Australian