Norway’s oil fund said it would reject Rome’s pick to chair Enel, in a public snub to Giorgia Meloni’s government ahead of the state-backed utility’s shareholders’ meeting.
The world’s biggest sovereign wealth fund, which owns a 2.2 per cent stake in Enel, said it would vote against Paolo Scaroni at the general meeting on May 10. It will instead support Marco Mazzucchelli, the candidate put forward by London-based hedge fund Covalis.
The tussle is a symbolic act of defiance as the Italian state is Enel’s largest shareholder with a 23 per cent stake, which means Scaroni’s appointment will probably pass. But it is uncommon for the normally conservative Norwegian state fund to publicly back an activist over a company’s management, and particularly a government proposal.
“Our starting point in Italian board elections is to support candidates presented by minority shareholders to strengthen board independence,” Norway’s oil fund told the Financial Times.
A close ally of former prime minister Silvio Berlusconi, 76-year-old Scaroni is a fixture of Italian corporate life. As chief executive of Eni for nine years, he has been instrumental in the oil group’s expansion in Russia. He has come under fire from foreign investors, including for criticising the EU’s handling of the energy crisis and its sanctions against the Kremlin. In September Scaroni said the curbs would benefit big oil exporters “such as Norway and the US, which makes my blood boil.” He was Enel’s chief executive two decades ago.
Enel said it could not comment in the run-up to its shareholder meeting.
Last month Covalis, which holds a 1 per cent stake in Enel and is run by Lithuania-born Zach Mecelis, presented an alternative slate of board candidates for Enel, saying “the selection process lacked transparency”.
Mecelis said he wanted the “toxic” process to end because it hindered the company’s stock market valuation. “Shareholders should get to choose. It’s a matter of governance and transparency,” he added.
Proxy advisers Glass Lewis and Frontis also backed the hedge fund. Mazzucchelli was better placed than Scaroni to counterbalance the influence of the chief executive on the board, Glass Lewis said.
Mondrian Investment Partners, which owns a 1.7 per cent Enel stake, also backed Covalis, saying it was “concerned” about Rome’s picks and “disappointed” about the lack of transparency.
The Norwegian fund will also back an alternative list of directors, albeit not that of Covalis. It decided to side with board members put forward by Assogestioni, the domestic fund industry trade body. In Italy minority shareholders get three board seats out of nine.
Proxy adviser ISS, which said some of the proposed director candidates “lacked relevant skills and experience”, also advised shareholders to back Assogestioni’s list.
The state-backed candidate for chief executive is Flavio Cattaneo, the vice-president of high-speed rail operator Italo and a former chief of grid operator Terna and telecommunications group Telecom Italia.
Covalis, which did not propose a chief executive, suggested it could pick a different one if its resolution wins next week. It fuelled speculation over whether outgoing chief Francesco Starace could stay longer.
Starace, who has served as Enel chief since 2014, reiterated on Thursday he was not available to serve another term.