Telecom Italia chief describes sacking as ‘soviet style putsch’
Amos Genish removed because of disagreement with activist investor
Former Telecom Italia chief executive Amos Genish. Photograph: Remo Casilli/Reuters
The ousted chief executive of Italy’s biggest phone group, Telecom Italia, described his sacking on Tuesday as a Soviet-style putsch and vowed to remain on the board as a director to defend the rights of shareholders.
Amos Genish, speaking a few hours after the board stripped him of his executive powers, told Reuters that the environment inside the company was dysfunctional and that several directors had been campaigning against him for months.
Mr Genish was removed following a clash over strategy at the country’s biggest phone carrier that came to a head this week, according to people familiar with the matter.
Mr Genish, a 58-year-old veteran executive from French media company Vivendi, is stepping down because activist investor Elliott Management disagreed on how the carrier would separate its landline network, said the people, who asked not to be identified because the announcement hasn’t been made.
Mr Genish and Telecom Italia’s largest shareholder, Vivendi, wanted the carrier to keep control of the landline grid, while Elliott, the company’s second-biggest investor, is seeking to spin off more than 51 per cent of the business.
The majority of directors backed by Elliott - 10 out of a total of 15 - voted against Mr Genish on a conference call to discuss his position Tuesday morning, said the people familiar.
Chairman Fulvio Conti will get interim chief executive powers, the people said.
Top shareholder Vivendi brought the experienced industry executive over from its Brazil business in early 2017 and got him appointed as Telecom Italia CEO later that year, tasked with improving profitability and shoring up its Brazilian operations. Elliott has sent mixed signals on whether it backs Mr Genish since it took a stake in Telecom Italia in March and demanded corporate governance reforms and asset sales. It has publicly supported his plan to separate the company’s fixed-line business and spend billions of euro to gain an edge in fifth-generation mobile services, yet has also signalled it opposes much of his approach.
Elliott had made clear it wanted the Israeli former army captain to be more radical in fixing the company, which is staggering under net debt of €25 billion and heavy pension liabilities and has not paid a dividend on its ordinary shares since 2013. The tension burst into the open in June when Mr Genish criticized unidentified directors for feeding “untrue and unreliable speculation.”
The board called him in to explain his comments and he apologized. In September, people familiar with the matter said directors representing Elliott have grown impatient over his handling of the company.
Italian newspaper Messaggero reported that chairman Fulvio Conti was considering board member Alfredo Altavilla and Italian veteran executive Rocco Sabelli as possible successors. People close to the company have also mentioned Mr Altavilla as a potential candidate along with another Telecom Italia board member, Luigi Gubitosi.
Mr Gubitosi (57) is a special administrator of Italy’s bankrupt flag carrier Alitalia and a former Merrill Lynch senior banker who has led Wind Telecomunicazioni and state-owned television network RAI.
Mr Altavilla (55), meanwhile, was a close aide to Fiat Chrysler’s late chief executive Sergio Marchionne. He was seen as one of the leading candidates for the top job at Fiat before he quit in July. – Bloomberg/Reuters