(Recasts lead, adds detail from statement, background)
MILAN, Sept 13 (Reuters) - Italy’s insurance sector regulator says Fondiaria-SAI is stalling over legal action against its past management and former owners and is bypassing the insurer to deal with the “serious irregularities” it identified in June.
Regulator ISVAP says Fondiaria, Italy’s second-largest insurer, may have committed serious irregularities in real estate operations and other dealings with the Ligresti family, which controlled the group until recently.
The company’s actions “were not adequate to enact a change in the situation...in light of...Fondiaria SAI’s inertia to cease the violations pointed out and to remove their effects,” the regulator was quoted as saying in a statement by the company late on Wednesday.
ISVAP named Matteo Caratozzolo “to undertake or have others undertake actions including legal action” against the insurer’s former owners and its management, the insurer said late on Wednesday.
Caratozzolo’s mandate ends on Jan. 31, and his powers regarding legal action supersede those of the insurer’s board of directors.
Fondiaria-SAI had planned to call a shareholders’ meeting by Oct. 31 to approve legal action against the former owners and management.
The regulator began an investigation in Oct. 2010 after a complaint by activist fund Amber Capital, which owns less than 2 percent of Fondiaria.
Amber said the Ligrestis were benefiting from real estate operations done between different units of the Fondiaria group. Consultancy fees worth around 40 million euros ($50 million) were also paid to Ligresti patriarch Salvatore.
The market capitalisation of Fondiaria has shrunk to 700 million euros from 5 billion five years ago.
Smaller insurer Unipol agreed in January to rescue Fondiaria in a complex four-way merger involving three capital increases. (Reporting by Jennifer Clark; Editing by David Cowell)