Telecom Italia Sacks CEO in Boardroom Tussle

Italian phone group Telecom Italia (TIM) sacked Chief Executive Amos Genish on Tuesday, removing the man who some directors had viewed as an obstacle to their campaign for a more aggressive shake-up at the company.

Genish was appointed last year to run the underperforming former monopoly by TIM's then controlling shareholder, French media group Vivendi, but since then directors backed by activist fund Elliott have wrested control of the board.

Telecom Italia said in a statement that it would meet on Sunday to appoint a new chief executive. It gave no explanation for Genish's sudden departure, barely a year after he took the reins of the underperforming company.

Genish was pursuing a three-year turnaround plan, focusing on a digital transformation and fixing TIM's finances, but sources say some Elliott directors wanted him to put higher priority on a possible spin-off of its fixed-line networks.

On Monday, Genish said in a statement he supported the idea of merging TIM's fixed-line assets with the broadband network being developed by smaller rival Open Fiber, provided TIM was in control of the combined network. Italy is preparing legislation that could lead to such a merger, sources close to the matter have said.

Vivendi reacted angrily to what it called a mean and cynical manoeuvre by some board members who moved secretly against Genish, convening the board while he was overseas on business.

"We decry, we condemn the destabilization behind this decision and the disgraceful methods. We reserve all our rights to defend all shareholders interests," a Vivendi spokesman said.

Chairman Fulvio Conti will hold the chief executive's powers until the board meets again on Sunday to appoint a new CEO.

Tuesday's meeting was convened while Genish was visiting South Korea. He joined the meeting by phone, said a source familiar with the matter.

TIM shares fell around 1 percent after the company statement but quickly recovered ground.

© Thomson Reuters 2018