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Court sentence threatens Eni CEO's re-election hopes

Source: Reuters - Mon, 31 Mar 2014 18:13 GMT
Author: Reuters
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* Paolo Scaroni sentenced to three years prison

* Says he will appeal against decision

* Current CEO mandate expires at May shareholder meeting (Recasts, adds comments, shares, background)

By Alberto Sisto and Stephen Jewkes

ROME/MILAN, March 31 (Reuters) - The chief executive of Italy's biggest company Eni was sentenced to three years in prison on Monday over inadequate environmental standards at the Porto Tolle power plant at a time when Scaroni was CEO at Italian utility Enel.

Paolo Scaroni said he will appeal against the verdict of the court in the north-eastern town of Rovigo, which threatens his chances of being reappointed head of oil giant Eni even though the charges are unlikely to fall foul of new anti-corruption rules.

Monday's court ruling, seen by Reuters, said that Scaroni had been handed the jail sentence and a five-year ban from holding public office, without giving further details.

Scaroni, who is under investigation over corruption charges in Algeria involving 43 percent-owned oil services group Saipem , has been at the helm of state-controlled Eni since 2005. His current mandate expires in May.

The Italian government has said it wants state-controlled companies to eject from their boards any director charged of financial crimes in its drive to fight corruption and improve corporate accountability.

The charges against Scaroni are not expected to technically break these rules, several sources said, but he faces a battle to secure re-election at Eni.

"It was tough enough before for Scaroni to get re-elected. It's going to be much, much tougher now," said Davide Tabarelli, head of Italian energy think-tank Nomisma Energia.

Scaroni, who has repeatedly denied any wrongdoing in the Saipem case, said he was shocked by Monday's decision.

"I am in no way involved in this matter and will appeal immediately," he said. "As shown by the defence, Enel's Porto Tolle station has always met the required standards."

Scaroni, one of Italy's most powerful businessmen, has built a reputation as one of Europe's most resilient and influential energy CEOs in a company that has ties with crucial gas suppliers Russia, Libya and Algeria.

Scaroni's legal woes showed no signs of weighing on Eni's share price, which ended the day up 0.17 percent.

Eni shares have been benefited in recent years from the discovery of new oil and gas reserves, particularly vast natural gas discoveries in Mozambique, billed as one of the world's most promising gas developments.

The Italian court also said in the document seen by Reuters that the CEO of Enel, Fulvio Conti, had been acquitted.

"Unlike Scaroni, that could well boost Conti's chances of re-election," an industry source said.

Conti, who was CFO under Scaroni at the time, has served three terms as Enel's CEO and his mandate also expires in about a month. (Editing by Valentina Za and David Goodman)

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