Italy's market watchdog seeks stronger oversight powers

05/06/2013

MILAN, May 6 (Reuters) - Italy's stock market watchdog should have wider powers to fight corporate wrongdoing, including that of removing board members of listed companies, its head said on Monday.

The call by Consob Chairman Giuseppe Vegas follows a series of high-profile corporate scandals, including allegations of financial irregularities at insurer Fondiaria-SAI, big loses linked to risky derivatives trades at No. 3 lender Monte dei Paschi and alleged corruption in Algeria by Europe's biggest oil service group Saipem.

Consob's existing oversight powers - including the possibility of starting a probe and seizing funds - are essentially limited to instances of insider trading and market manipulation and can target those who sit on a company's internal audit committee but not top executives.

Those powers should be extended to board members and also cover other offences, such as false corporate statements or irregular transactions between units of the same company, Vegas said at Consob's annual meeting with the financial community.

"The possibility of taking precautionary measures (against board members) ... could allow us to intervene before irreparable damage is done," Vegas said, referring to the possibility for Consob to remove or at least suspend those suspected of illict behaviour. (Reporting by Silvia Aloisi; Editing by David Holmes)



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