Rome, Italy | – Shareholders at Italy state-controlled oil major Eni rejected a proposal to introduce an ethics clause in the oil and gas group’s bylaws in a setback to the government’s efforts to clean up corporate Italy.
The government-sponsored motion to introduce a clause in Eni’s bylaws that would force managers indicted of certain financial crimes to step down did not win the required two-third support at a shareholder meeting on Thursday as institutional investors, most of them international, voted against it.
The new government of Prime Minister Matteo Renzi has urged state-controlled companies to eject from their boards any director charged of financial crimes in a drive to fight corruption and improve corporate accountability.
However, some investors and outgoing Eni Chief Executive Paolo Scaroni have complained that such clauses smack of government interference in a listed company.
“No company in the world has a clause like this,” Scaroni said on the sidelines of the shareholder meeting.
Corporate Italy has been shaken by a string of corruption scandals often involving alleged kickbacks to politicians and financial intermediaries.
The 39-year-old Renzi, whose campaign for change earned him the nickname “Demolition Man,” has gone out of his way to court the market to lure investments back into the country.
But 39 percent of Eni shareholders present on Thursday, mostly foreign funds, voted against the Treasury’s motion to have the clause inserted into the group’s bylaws.
“This shows the government is out of touch with the market despite what Renzi says,” said one analyst, who asked to remain anonymous.
After nine years at the helm, Scaroni is set to step down on Friday after shareholders approved a new board for Italy’s biggest listed company.
Veteran Eni executive Claudio Descalzi, who has helped focus Eni on lucrative resource discoveries, is slated to be voted new CEO at a board meeting scheduled for Friday.
Renzi had promised to listen to the market in choosing executives at state companies, who get nominated every three years.