Former head
of Monte dei Paschi's finance department has been arrested in fraud and bribery
inquiry
The Guardian, Reuters, Thursday 14 February 2013
Italian police have arrested the former head of Monte dei Paschi's finance department in an inquiry into alleged fraud and bribery at the world's oldest bank. Gianluca Baldassarri is the first person to be arrested in a widening scandal that has rocked Italy's third largest bank and triggered a financial and political storm ahead of national elections on 24 February.
Piazza Salimbeni and the entrance to Monte dei Paschi bank at rear left. Photograph: EPA |
Italian police have arrested the former head of Monte dei Paschi's finance department in an inquiry into alleged fraud and bribery at the world's oldest bank. Gianluca Baldassarri is the first person to be arrested in a widening scandal that has rocked Italy's third largest bank and triggered a financial and political storm ahead of national elections on 24 February.
Prosecutors
in the Tuscan city of Siena, where the 540-year-old bank is based, said
Baldassarri was accused of helping mislead regulators over the true nature of a
secret derivative contract that was found in a safe by the bank's new
management in October 2012.
Prosecutors
have also sent a written request to speak to Santander Chairman Emilio Botin as
a witness as part of their probe, a judicial source said.
In a
statement, the prosecutors said Baldassarri was detained in Italy's financial
capital Milan because they feared he might leave the country. His home in Milan
was being searched, the statement added.
Contacted
by Reuters, Baldassarri's lawyer, Filippo Dinacci, declined to comment.
Baldassari left Monte dei Paschi shortly after the arrival of new chief
executive Fabrizio Viola in January 2012.
Prosecutors
in Siena are investigating accusations of corruption in Monte dei Paschi's
costly acquisition of smaller rival Antonveneta in 2007, as well as a series of
loss-making derivative and structured finance trades dating back to 2006-09,
which the bank says it discovered only last October.
The bank's
former managers, who are being questioned by magistrates, have declined to
comment. Italian prosecutors seized some €40m last week as part of their
investigation. The prosecution seizure order, seen by Reuters, said the funds
belonged to Baldassarri and four other people suspected of criminal conspiracy
to commit fraud.
The scandal
has raised questions over the future of the bank, which last month won final
approval for a €3.9bn state bailout.
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