Leonardo CEO to Face Trial Over Previous Position at Bank

PARIS --- Two former senior executives of Italy’s Banco Monte dei Paschi di Siena, including the current CEO of state-controlled aerospace and defense contractor Leonardo, will stand trial on charges of alleged market rigging and accounting fraud, Reuters reported Friday morning citing Italian legal sources.

Alessandro Profumo, who served as chief executive and chairman of BMPS before being appointed CEO of Leonardo, and another senior BMPS executive, Fabrizio Viola, have been sent to trial by magistrates in Milan investigating two of the bank’s structured finance operations.

"I am surprised but I can confirm with determination that I am very serene about the decisions made at MPS,” Profumo said in a statement to Italian wire service ANSA. It also quoted “sources close to Profumo” as saying that "We will demonstrate that we have always operated correctly in the interests of the institution and of its shareholders, moreover in close cooperation with the Bank of Italy and Consob,” the Italian stock market regulator. “I reaffirm my total trust in the judiciary," Profumo said.

Investigating magistrate Alessandra Del Corvo refused to dismiss the charges, as requested by the state prosecutor, according to Italian media reports, and the trial will begin on July 17. BMPS, as a corporate entity, will also face trial as, under Italian law, companies are held responsible for the actions of their managers, and can be fined if found guilty.

Profumo is the third consecutive Leonardo CEO to be charged while in office for alleged offences committed in previous jobs.

The employment contract of Profumo’s immediate predecessor, Mauro Moretti, was not renewed after he was ordered to stand trial for his indirect responsibility for a train crash which killed 38 people while he was in charge of Italy’s state-owned railways.

Moretti in turn was appointed CEO of Leonardo (then known as Finmeccanica), after its CEO Giuseppe Orsi resigned when charged with corruption and bribery over the sale of AW101 helicopters to India while he was chief executive of Agusta-Westland, a Finmeccanica subsidiary.

Orsi, and his successor at AgustaWestland, Bruno Spagnolini, were comprehensively cleared by a Court of Appeals after Italy’s top court, the Corte di Cassazione, struck down their previous conviction on the grounds that “no offence was committed.”

The Leonardo board of directors will have to decide whether to follow company precedent or, more likely, to ignore the referral to trial as the alleged offenses are purely formal and have little substance.

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