Italy puts ‘Golden Power’ rule into force at TIM after government ruling

Italy puts ‘Golden Power’ rule into force at TIM after government ruling

Italy’s defence minister Roberta Pinotti has succeeded in getting the country’s Council of Ministers to invoke special powers on TIM, because of Vivendi’s shareholding.

As a result TIM and two subsidiaries, Sparkle and Telsy, have to put in place strict corporate governance measures, including allowing an Italian citizen to look after national security measures.

TIM, the new name for Telecom Italia, has acknowledged receiving the so-called Golden Power instruction.

TIM, Sparkle and Telsy will ensure that certain security functions are assigned to “a member of the board of directors … who is an Italian citizen, who has security clearance, and is approved by the government for the role”. Some of the rules “have already been implemented by the company”, said TIM in a statement.

The Italian Council of Ministers said that Vivendi held “shares in excess of the thresholds” specified in a 2012 law. They were “companies holding significant assets strategic for defence and national security”, it added.

Pinotti and her colleague Minister of the Interior Marco Minniti put the decree to the Council of Ministers.

The Council said: “Among the general requirements, some relate to the stable maintenance of the national network of management and security functions of networks and services and supplies that support ‘strategic’ and ‘key strategic’ activities, others are designed to ensure continuity of functions related to activities of strategic importance for the national defence and security system.”

It added: “It was also considered necessary to impose specific requirements on corporate governance”, which include the citizenship requirements.

Vivendi, a French company, is the largest shareholder in TIM, with a 24% stake. It has put its own executives in place as both chairman and CEO.

“The decree provides for a series of monitoring and control measures to ensure compliance with the prescriptions and conditions imposed,” said the Council of Ministers.

TIM said that it had to have a security organisation in charge of relevant activities. It would be involved “in all decision-making processes pertaining to strategic activities and the network, [and] must be entrusted to a security official chosen from a shortlist of three names proposed by the Department of Information Security of the Presidency of the Council of Ministers.”

TIM said it is “examining the measure and has a 90-day term to comply with the various requirements. Thereafter, on a half-yearly basis, it will be required to transmit a report stating the measures it has adopted in order to comply with the various requirements.”

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