January 31, 2020 / 12:44 PM / in 2 months

Former Popolare di Bari execs put under house arrest in probe into bank's collapse

MILAN, Jan 31 (Reuters) - Police in the southern Italian town of Bari have put three former top managers of regional lender Popolare di Bari under house arrest as part of an ongoing probe into alleged false accounting, according to a police statement and a judicial document seen by Reuters.

Popolare di Bari, the biggest bank in Italy’ disadvantaged south is set to be rescued by the government and healthy lenders after temporary administrators unveiled a preliminary 1.4 billion euro ($1.6 billion) capital shortfall.

Prosecutors in Bari are looking into the causes of the lender’s collapse.

Popolare di Bari was put under special administration by the Bank of Italy in December, having been weakened by mismanagement, the acquisition of a troubled rival and a deep recession from which the local economy has been unable to recover.

The judicial document said the bank had falsely represented its accounts over several years by failing to book goodwill impairment charges, including on Banca Tercas, which Popolare di Bari agreed to take over in 2014. It also mentioned alleged charges of obstructing regulators.

The three executives placed under house arrest include the bank’s former Chairman Marco Jacobini and his son Gianluca, Popolare di Bari’s former general manager.

A lawyer for Marco Jacobini was not immediately available to comment and Reuters was unable to immediately identify Gianluca’s legal representatives.

Former CEO Vincenzo De Bustis, who left Popolare di Bari in 2014 but returned to the helm in 2018, was banned from holding executive roles in banking groups or other companies, but not placed under house arrest, the document showed.

Reuters was unable to contact De Bustis.

The Jacobini family has held the reins of the bank since it was founded in 1960 by a group of local businessmen led by Marco’s father Luigi Jacobini.

Police said magistrates had ordered searches of the homes and offices of the four managers under investigation and of six other officials of the bank.

Popolare di Bari’s rescue is the latest in a string of banking crises which have cost the state and other Italian lenders more than 20 billion euros since 2015.($1 = 0.9014 euros) (Reporting by Domenico Lusi, writing by Maria Pia Quaglia; Editing by Kirsten Donovan)

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