Telecom Italia's largest shareholder renewed accusations on Monday of government interference in the running of Italy's biggest telecommunications firm.
In an interview published in Corriere della Sera two days after Spain's Telefonica teamed up with a group of Italian investors to buy a controlling stake in TI, Pirelli Chairman Marco Tronchetti Provera said: "There's no room for independent entrepreneurs in Italy".
"In this country, it's inconceivable for a company like TI to be managed autonomously by a private businessman and outside a system of political relations," Tronchetti Provera told Italy's biggest daily.
Pirelli controls 18% of TI, which has a market capitalisation of around 44 billion euros, through holding company Olimpia.
The tyre group is now out to sell its 80% stake in Olimpia but interest from America's AT&T and Mexico's America Movil sparked worried protests from critics, including members of the centre-left government, who want debt-laden TI to remain in Italian hands.
Although TI was privatised in 1997, the government still holds veto powers over the ex-monopoly's corporate decisions.
AT&T subsequently withdrew from talks with Pirelli but Telefonica came forward on Saturday, saying it was joining an Italian consortium that was ready to pay 4.1 billion euros for Olimpia.
The consortium includes Italian insurer Generali, Italian banks Intesa Sanpaolo and Mediobanca, and the Benetton family, which is already a major TI shareholder.
The partners plan to place their shares in a new holding company called Telco which will control 23.6% of TI voting shares.
Telefonica has agreed to pay 2.3 billion euros for a 42% stake in Telco, the equivalent of 2.82 euros per TI share or 25% more than the market price.
The deal, which has squeezed out America Movil, should maintain Italian-majority ownership of the former state monopoly and appease the politicians who are keen for TI's Italian identity to be preserved.
It also appeared to block a possible move on TI by the media-based business empire of former premier and opposition chief Silvio Berlusconi.
HOUSE SPEAKER: "THE WORST HAS BEEN AVOIDED".
House Speaker Fausto Bertinotti, a former hard-left party chief, told reporters on Monday that "the worst has been avoided by guaranteeing a broad Italian presence".
Premier Romano Prodi himself said earlier this month that he hoped TI would remain Italian but has firmly denied interference in the company's affairs.
But Tronchetti Provera, who quit as TI chairman last September after clashing with Prodi over company strategy, told Turin daily La Stampa in another interview published Monday that a "financial and political alliance" had conspired against him.
"I was made to pay for my autonomy but I will continue to be an entrepreneur and continue to fight for businessmen's independence from politics. I respect the world of politics but I also expect respect from politicians," he said.
In Brussels, the spokesman for European Internal Market Commissioner Charlie McCreevy said there was no indication that market rules had not been respected in the TI case.
"It's up to the markets and the companies themselves to decide in which way they want to merge... We do not have any information that would lead us to think that this was not the case," spokesman Oliver Drewes said.
Prodi on Sunday again denied accusations of meddling in TI's affairs and discouraging foreign interest in the company.
"I am amazed by certain comments according to which the government exercised too much influence... In any other country in the world there would have been far greater influence. Instead, the government behaved very correctly and very discretely," the former European Commission chief said.
Meanwhile, TI shares fell in Monday afternoon trading, dropping almost 1.7% to 2.23 euros. Pirelli shares were down 1.29% to 0.91 euros.
Before Tronchetti Provera bought TI in 2001, Pirelli shares were worth more than three euros while TI shares were trading at around four euros.
In order to help buy TI, Tronchetti Provera used 4.4 billion euros of Pirelli cash and has since been selling Pirelli assets to help pay off debts stemming from the deal.
