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May 17, 2012, 03.26 AM IST | Source: Reuters

Finmeccanica boss denies reports of power struggle

FINMECCANICA:Finmeccanica boss denies reports of power struggle

By Paolo Biondi

ROME (Reuters) - Finmeccanica SpA head Giuseppe Orsi, under pressure from a graft investigation and anarchist threats, denied news reports of a power struggle at the top of the loss-making defence company that he is seeking to turn around.

Chairman and chief executive Orsi told shareholders at a meeting on Wednesday that he would keep his powers at the state-controlled company, with backing from the Treasury for his restructuring plan.

Italian newspapers earlier reported that chief financial officer Alessandro Pansa, backed by Economy Deputy Minister Vittorio Grilli, could take over Orsi's responsibilities on strategy, acquisitions and finance.

"There is no reshuffling of powers," on the agenda of a board meeting on Wednesday, Orsi told shareholders at the annual meeting.

In a statement issued after the meeting, Finmeccanica said its board agreed Orsi would retain his powers over the overall management of the group, including strategy.

It said Pansa had been confirmed as chief operating officer and would continue to report to Orsi as regards management of the group's operating companies.

The board also appointed Gian Piero Cutillo as Chief Financial Officer, who will report to Pansa.

Finmeccanica, Italy's No. 2 industrial group after car maker Fiat SpA , is planning to sell rail and energy assets for 1 billion euros this year to hang on to its investment-grade credit rating following a 2.3 billion euro net loss in 2011.

On Wednesday, Italian aerospace group Avio said it had filed to list its ordinary shares on the Milan bourse. Finmeccanica owns 14 percent of Avio.

But a probe of alleged corruption in India engulfing Orsi and the wounding in May of a company executive by masked gunmen believed to be linked to an anarchist group have complicated turnaround efforts.

The graft investigation raised concerns that Orsi might have to take a step back, just months after previous boss Pier Francesco Guarguaglini was forced out by a separate scandal.

Orsi, who in April received the backing of Industry Minister Corrado Passera, has denied any wrongdoing and said violence would not deter the group.

He arrived at the shareholder meeting with higher security measures. The anarchists claiming responsibility for the attack said they would strike again against Finmeccanica.

The Treasury, which has responsibility for the government's stake of about 30 percent, called for restructuring to go ahead.

"(The Treasury) underlines the need for management to put in place all measures needed to restructure crisis-hit sectors, cut debt and improve profitability," a Treasury representative, said at the meeting.

He said Finmeccanica should avoid offering pay packages such as the one given to Guarguaglini, who received in 2011 an overall 9.5 million euros, raising politicians' eyebrows.

In a document on its website on Wednesday, Finmeccanica said probes into Indian orders and ties with businessman Ralph Haschke, who advised the group, would not affect 2011 results retrospectively.

(Writing by Danilo Masoni and Stephen Jewkes; editing by Erica Billingham and Andre Grenon)

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