Italy makes U-turn on loyalty shares

by Rachel Sanderson for The Financial Times

Italy has staged a U-turn on the issue of creating “loyalty shares” by Italian companies after pressure from some of the world’s largest institutional investors. The decision was seen as a sign of prime minister Matteo Renzi’s openness to foreign investment.

The step comes as Mr Renzi seeks to boost foreign investment to help pull Italy out of its triple-dip recession. It is also the 40-year-old reformist leader’s second strike against Italy’s corporate arcane governance rules in as many months as the government is already seeking a shake-up of its hidebound mutual banks sector.

The decision over so-called loyalty shares follows an open letter this week from more than 100 investors including Fidelity, Aviva, Threadneedle Investments, Schroders and UBS, academics and board members who had called on Mr Renzi to strike down a provision supporting the creation of multiple voting rights at Italian listed companies which they said made Italy hostile to foreign investment. Read more here.



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