UPDATE 1-Vivendi's move on Telecom Italia rattles funds
(Recasts with statement from funds, adds no comment from TI, Vivendi)
By Maria Pia Quaglia
MILAN Nov 19 (Reuters) - A group of Italian and foreign funds said on Thursday Vivendi's proposal for additional members on the board of Telecom Italia raised governance concerns and questions about its intentions for the Italian phone group.
Vivendi has gradually built up a 20.116 percent stake in Telecom Italia to become its largest shareholder. The French media group wants to increase the number of board members to 17 from the current 13 and appoint three of its top executives and a French consultant as its representatives.
In a letter addressed to Telecom Italia's Chairman Giuseppe Recchi, CEO Marco Patuano and its entire board, the funds committee asked that Vivendi's request be urgently examined.
They said the move would not only dilute institutional investors' representation on the board but also give Vivendi the possibility to "exercise greater influence than it is guaranteed by the Telecom Italia stake it holds".
They also raised concerns about the lack of protection against the Vivendi directors' ability to influence the fortunes of a company the French group competes with.
Telecom Italia had no immediate comment and Vivendi declined to comment.
The letter follows an earlier Reuters report, in which a senior industry source said Italian funds were worried that Vivendi might gain too much influence if it manages to secure nearly a quarter of all board seats at an upcoming shareholder meeting in December. Continuación...