City turns up heat on Olivetti

Leading institutional investors in Olivetti are to press for the appointment of an independent non-executive chairman at the crisis-hit Italian computer group during a series of crunch meetings in London tomorrow with the company's embattled chief executive, Francesco Caio.

One large London-based investor also said it would insist on a clear and transparent breakdown of Olivetti's exact financial position, otherwise it would have to review its investment in the company.

Olivetti was plunged into crisis two weeks ago after its long-serving chairman, Carlo De Benedetti, was forced out after 18 years at the helm, only to be followed by its chief financial officer, Renzo Francesconi, who quit, alleging that the extent of its first-half losses had been disguised.

London-based fund managers controlling more than a quarter of Olivetti's shares were instrumental in the departure of Mr De Benedetti and have pressed for a meeting with the Olivetti management since Mr Francesconi's claims. Olivetti shares closed at L590 (26p) last week against the L1,000 foreign investors paid in a pounds 913m rescue rights issue last December.

Between 30 and 40 per cent of Olivetti's shares are held in London. ING Barings Asset Management is one of the biggest shareholders with a stake of just under 6 per cent. Other shareholders include Nomura Capital Management, Mercury Asset Management and Philips and Drew Fund Management.

Mr Caio is due to speak to investment analysts and institutions in Italy today before flying over to Britain to do the same in London tomorrow. One institutional investor said: "We will be pressing for clarification of Olivetti's strategy and management structure. We would be much happier if a non-executive chairman was appointed from outside to represent outside shareholders. But most of all people want to know what the real numbers are and what Olivetti's financial standing is.

"It is all very well putting new management in but the question is whether we are left with a company worth managing. We are looking at a company whose prospects have deteriorated significantly compared with expectations only a fortnight ago."

Olivetti, which reported a L440bn loss for the first six months of the year, has been in turmoil since Mr De Benedetti's resignation and the subsequent allegations by Mr Francesconi. Its shares have twice been suspended, it has been hauled before the Italian stock market watchdog, Consob, to answer questions about its results, and Mr Caio has appeared before the industry commission of Italy's influential upper house Senate.

Mr Caio told the commission last week that Olivetti was seeking a partner for its loss-making personal computer division and its office equipment company, Lexikon.