July 12, 2018 / 12:21 PM / a year ago

UPDATE 1-Banca Carige's governance rifts widen as top shareholder set to quit board

(Adds details, background)

MILAN, July 12 (Reuters) - The top shareholder of Italy’s Banca Carige said on Thursday he intended to resign from the board, another blow to the lender as it seeks to restructure and fix corporate governance issues.

Vittorio Malacalza, a businessman who owns over 20 percent of the Genoa-based bank, said recent resignations of other board members had influenced his decision to quit.

Chairman Giuseppe Tesauro and two board members resigned in recent weeks due to a row over the running of the bank.

Carige struggled to pull through a cash call demanded by regulators at the end of last year, and is working to reduce a large soured loan burden under Chief Executive Paolo Fiorentino, a former veteran UniCredit manager.

Fiorentino was appointed CEO a year ago after Malacalza fell out with the previous chief executive. Malacalza, however, criticised the handling of the recapitalisation under Fiorentino and investment bankers have voiced concerns about Malacalza’s influence over the bank, saying it is complicating the lender’s search for a merger partner.

It was not clear whether Malacalza’s resignation from the board would soothe the tensions, allowing Fiorentino to complete the turnaround of the bank, or whether Malacalza would continue, from outside the board, to oppose Fiorentino’s strategy.

Tesauro said when he quit that the bank’s chief executive made his job “almost impossible.” But Fiorentino has the support of sector regulators, sources told Reuters.

Malacalza said he tendered his resignation on Wednesday but would formalise the step and explain his reasons at a later date.

He added in his statement that he remained “committed to Banca Carige, fully confident of its potential to consolidate and relaunch thanks to the recent efforts of shareholders.”

Despite the recent departures the bank’s board will not be dissolved as eight out of its 15 members would have to leave in order for this to happen.

However, on Monday, Raffaele Mincione, who holds a stake of more than 5 percent, asked for a shareholder meeting to vote on removing the board and appointing a new one, saying governance had “suddenly deteriorated”, putting at risk the implementation of restructuring measures approved by the European Central Bank.

The lender is expected to schedule a shareholders’ meeting to be held after the summer. (Reporting by Giulia Segreti and Paola Arosio; Editing by Steve Scherer and Susan Fenton)

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