ROME: Italy has imposed several curbs on China’s Sinochem to try to resolve a governance spat in Pirelli, the tyre maker says, confirming an earlier Reuters report.
The curbs will remain in force as long as Sinochem retains a stake in Pirelli above 9.99%, the company said in a statement, in a sign that Rome wants Sinochem to cut its 34% shareholding.
Beijing-controlled Sinochem is Pirelli’s largest shareholder, while Camfin, the vehicle of Italian businessman Marco Tronchetti Provera, holds around 26%, with plans to increase it to up to 29.9%.
Both Pirelli and Camfin have called for restrictions on Sinochem, saying that its ownership position complicates Pirelli’s expansion plans in the United States, as Washington tightens restrictions on Chinese technology in the automotive sector.
The United States is a key market for Pirelli’s premium tyre business.
Prime Minister Giorgia Meloni’s government imposed the curbs last week using golden power legislation aimed at shielding strategic assets.
Italy ruled that Sinochem was entitled to submit a list of candidates for Pirelli’s board renewal comprising a maximum of three members, two of whom must be independent.
The company’s board currently has 15 members, eight of whom come from its Chinese investor.
Sinochem board members will not be allowed to hold top corporate offices such as chairman or chief executive, Pirelli said, outlining the prescriptions.
Pirelli’s shareholder meeting is due to renew the board in June.
The government also reiterated that Sinochem must avoid exerting any influence over the group, under requirements first imposed in 2023.
Pirelli will not have to share sensitive information with its Chinese investor, the tyre maker’s statement said.
In January, Camfin had said it would not renew its shareholder pact with Sinochem, paving the way for a new intervention by the Italian government.
Rome would have preferred the companies to reach an agreement, but in the absence of any deal, it intervened through golden powers.
Reuters reported last year that Sinochem was ready to assess offers with a market premium from potential bidders for all of part of its Pirelli stake.
One of the new prescriptions requires Sinochem to notify the government of any share transfer, which must not be made in favour of entities affiliated with or controlled by the Chinese government. — Reuters
