The following is the content of a letter sent today to the Editor of the Wall Street Journal Europe, Frederick Kempe, by Roberto Colaninno, chairman and CEO of Telecom Italia:
Dear Sir,
Today your newspaper published an article to which I must respond with corrections.
1. With regard to the Seat-Tin.it transaction, and the theoretical conflict of interest the article seeks to portray in as controversial a way as possible, it is important to underline that this conflict - theoretical since it is plainly ridiculous to suggest, as does the author of the article, that a 10 billion euro transaction that brought about the creation of a European leader in the Internet, publishing and Media sectors, was conceived to produce an 8 million euro capital gain - resulted from an indirect minority holding in a closed fund over which I and other investors in Hopa had zero influence on investment decisions;
2. The Board of Telecom Italia was informed, consistent with the law, of this theoretical conflict of interest before it decided to proceed with the deal - indeed this was signalled at the very outset of a long Board meeting to consider the transaction, and therefore the deal remained completely subject to the decision of the Board. During the meeting, which concluded with all the Board members voting in favour, (obviously with the abstention of myself and Board member Gnutti) the objectives of the operation were considered to have been presented correctly for the market and certainly in accordance with the law;
3. Seat Pagine Gialle shares, having risen to over 7 euros following the announcement of the deal, have indeed fallen back since then as have the shares of every single so called ´new economy´ company in the world. In the case of Seat Pagine Gialle, though, the fall has been significantly inferior to that recorded by so-called "comparable" companies at an international level. It is also worth remembering that to ensure maximum transparency to the market, and equal treatment for all Seat shareholders (including savings shareholders), the opportunity was given to participate in a voluntary Public Tender Offer, promoted by Telecom Italia in May 2000, at the price of 4.2 euros per share.
4. As for the investment in TIM shares, these purchases were made over time with a view to avoiding a dilution of Telecom Italia shareholders´ stake in TIM as a result of a strategic deal or deals being contemplated at the time. They were carried out in the market and within the limit of the powers granted by the Board to the Chief Executive.
Quite apart from this unacceptable attack on both my professional and moral integrity and that of the Telecom Italia Board members, by continually and deliberately distorting, through partial and selective reporting, any news about Telecom Italia, the Editor of Breakingviews is guilty of the greatest disdain he can show in his profession - that for the facts and for the intelligence of his readership.