With regard to events concerning Sparkle, a company 100% owned by Telecom Italia and the consequent legal proceedings, from an preliminary review of the 1,600 page court order served on Sparkle, it appears that the inquiries refer to a case already known to the company which was the subject of internal inquiries and audits carried out in July 2007.
In the notes to the FY 2007 consolidated financial statements Telecom Italia disclosed that Sparkle had been the subject of investigations by the judicial authorities concerning alleged VAT fraud by a supplier operating in "Premium" telecommunications services. Besides collaborating with the investigating authorities, as a precautionary measure Sparkle broke off all commercial relations with the subjects under investigation.
With respect to Sparkle, the allegations refer to the period 2005-2007. Today, as a precautionary measure, the authorities have seized a sum of around €300 million of Sparkle's cash and borrowings, which the court says corresponds to the value of the alleged tax credit illegally accrued over the years in question.
The Sparkle Board of Directors, taking a prudent approach, has resolved not to proceed with the approval of its 31 December 2009 statements, since it must examine in full the very large quantity of documentation received in order to arrive at an accurate picture and assessment of the situation.
Given the impossibility of fully appraising Sparkle's results at present, Chairman Gabriele Galateri di Genola and CEO Franco Bernabè will therefore propose to the Board of Directors of Telecom Italia which is due to meet tomorrow, to postpone the approval of the Group's consolidated and separate financial statements at 31.12.2009 (as well as the Shareholders' Meeting scheduled for 12 April, and the update to the 3-Year Plan) until the next board meeting due to take place on 25 March.
As a consequence, the meeting with Analysts, Investors and the Press, called to present the FY 2009 results and an update of the 3-Year Plan, originally scheduled for 26 February will be reconvened following the approval of the consolidated group statements, and replaced by a conference call on 25 February following the board meeting.
The Chairman and the CEO, in the interest of all shareholders and all employees, will take every possible step to protect the value of the Telecom Italia Group.
*******
The conference call will be held on Thursday 25 February 2010, at 5:30 pm (Italian time).
To participate in the conference please call the following numbers:
Analists and Investors: + 39 06 33485042 or alternatively + 39 06 33486868
Journalists: + 39 06 33168
For further information please visit www.telecomitalia.it/25febb2010
Milan, 24 February 2010