September 1, 2015 / 5:12 PM / 2 years ago

REFILE-Italy's market watchdog fines postal service ahead of IPO

(Refiled to correct typographical error in spelling of “former”)

MILAN, Sept 1 (Reuters) - Italy’s market watchdog has imposed a 60,000 euro ($67,620) fine on Poste Italiane, the postal service the government is set to privatise via a stock market listing in October, for behaving improperly in providing investment services to its clients.

Poste is cutting back in its costly mail delivery business and expanding in financial services and insurance ahead of the long-awaited share sale that is set to be Italy’s biggest privatisation in a decade.

But market watchdog Consob said it found in an audit that Poste customers had been directed towards investment products on which the postal service earned large upfront fees and encouraged to liquidate investments to switch into different products regardless of their real needs.

“Poste Italiane ... has allowed, at the level of operational relationships with clients, a behaviour that does not comply with a duty to act with diligence, correctness and transparency,” Consob wrote in its bulletin.

Consob fined several former and current Poste employees, including former chief executive Massimo Sarmi, for a total of 60,000 euros which Poste will be required to pay.

A spokesman for Poste declined to give any immediate comment. ($1 = 0.8873 euros) (Reporting by Valentina Za and Isla Binnie; Editing by Greg Mahlich)

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