Milan

Italian regulator probes share sale at oil-services Saipem

Huge number sold before company announced profit fall

Italian regulator probes share sale at oil-services Saipem

Milan, January 30 - The share value of Italian oil-service provider Saipem plunged Wednesday after regulators announced a probe of unusual share sales that occurred shortly before the company announced a dramatic drop in forecast profits. Financial market regulator Consob announced it would review the sale of almost 10 million shares in Saipem made after the close of trading on Monday, just hours before the company announced that its 2013 profits would be less than half the amount previously expected. Shares in Saipem SpA, Europe's biggest oil-service provider, plunged a record 39% by mid-afternoon Wednesday in Milan trading as a result, Bloomberg reported. Bank of America Corp.'s Merrill Lynch unit offered to sell 9.97 million shares, equivalent to 2.3% of the company, on behalf of an institutional client after the close of trading on January 28, Bloomberg said. This is the second time in less than two months that Saipem has drawn regulators' scrutiny. In early December, share prices plunged after the company, whose largest shareholder is Italian energy giant Eni SpA, was implicated in a corruption probe related to contracts in Algeria. Chief Executive Officer Pietro Franco Tali was replaced in early December by Umberto Vergine because of the probe. Two other senior managers were also suspended from Milan-based Saipem. The company's board also ordered an internal investigation using outside consultants. Tali, in his resignation statement, said he was not "in any way involved" in the case, but said his resignation would help the company.

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