Fastweb, an Italian broadband provider said on Friday that Stefano Parisi would step down temporarily as chief executive under an agreement reached with prosecutors to avoid having the company placed under court administration during an investigation into its alleged role in tax fraud.
Fastweb also said it was setting aside €11m as a fiduciary guarantee pending the outcome of the investigation.
Mr Parisi is to be replaced by Carsten Schloter, chief executive of Swisscom, which owns 82 per cent of Fastweb. Mr Parisi will be given an unspecified post in the parent company. Both boards expressed their confidence in Mr Parisi and their belief that he was not involved in the alleged fraud.
Prosecutors had asked the court handling the case to place Fastweb and Sparkle, a unit of Telecom Italia, under special administration while investigations continued into their alleged role in a scam involving fictitious services and paper companies set up to defraud the government of value added tax.
Two Fastweb managers, who were sacked from the company, and Silvio Scaglia, former chairman and billionaire founder of the company, were among more than 50 people for whom Italian police issued arrest warrants in February. Mr Parisi is under investigation but has not been arrested.
Sparkle would not be placed under administration either, Italian media reported. Telecom Italia had no immediate comment. Police seized €300m of cash and other assets of Sparkle when the investigation was made public in February.
The complex case of tax fraud and money laundering is said by prosecutors to have involved a total turnover of €2bn with companies involved in Italy, the UK, Russia, Panama and others. The case has shaken Italy’s business and political establishment with leaked transcripts of alleged telephone intercepts splashed across newspapers. Among those arrested was a senator of Italy’s ruling People of Liberty party alleged to have been elected with the help of the Mafia.