The Chinese company Sinochem will have no power to control or acquire any technology from Pirelli, as stipulated in a draft regulation prepared by the government based on the Golden Power law, which Agenzia Nova has viewed.
- According to the document, China National Tire & Rubber Corporation (CNRC), a company within the ChemChina/Sinochem group, must “refrain from implementing, directly or through its controlled companies or other shareholders’ agreements, any form of management or coordination of Pirelli.” Not only will the Chinese shareholders be prohibited from having a role in management and coordination, but they must also “refrain from providing specific directives to the board of directors and auditors of Pirelli, who are nominated from their candidate lists, that may indirectly influence management and coordination activities” towards the company.
- A decision is expected next week.
In addition to establishing these essential conditions, the draft regulation requires modifying the shareholders’ agreement between the Chinese shareholders of CNRC and Camfin, a holding company.
- Specifically, the section stating that “the list to be presented by CNRC will include Dr Marco Tronchetti Provera, a non-independent candidate, and an independent candidate designated by Mtp” is modified as follows: “The list to be presented by CNRC will include three non-independent candidates, including the CEO, and one independent candidate designated by Mtp, to be chosen among the top nine positions on the list.”
- Thus, Mtp – a company controlled by Tronchetti Provera – will present a list of names from which the Chinese shareholders can select. Furthermore, if “for any reason, it becomes necessary to appoint a new Board of Directors during the term, CNRC will deposit a list in accordance with the provisions of this agreement.”
Pirelli must reject any requests that exceed the normal exercise of shareholder rights and refrain from implementing any management or organizational initiatives proposed by subjects linked to the Chinese State-owned Assets Supervision and Administration Commission of the State Council (SASAC).
- This applies specifically to requests regarding the sharing of information related to technologies protected by industrial property rights, intellectual property, or any information related to know-how associated with such technologies, even if they are in the development phase; the design and implementation of production lines that incorporate process innovations derived from held patents, ensuring that the said design and implementation are overseen by non-Chinese personnel; the centralized treasury mechanism managed by Sinochem; direct access to the management and administrative information systems, including the Enterprise Resource Planning (ERP) platforms of the target company or its controlled companies, including Chinese branches; the transfer of assets, ICT systems, and services of Pirelli Group companies to infrastructures located outside the jurisdiction of European laws and/or managed by entities linked to the Chinese government; and the transfer or sharing with entities linked to the Chinese government of any data collected or processed through CyberTM tyre technology and its possible subsequent implementations or developments.
As stated in the draft, the authorization for the notification submitted by CNRC is also based on the essential condition that all commitments indicated by China National Tire & Rubber Corporation in the context of the proceedings are respected.
- Therefore, in the event of non-compliance with any of these commitments and the provisions issued with this measure, the operation must be re-evaluated by the Presidency of the Council of Ministers.
The executive’s choice on Pirelli is highly significant, as it could preview what kind of approach it will implement with a series of other China-related dossiers. Among them is that concerning CDP Reti, which manages equity investments in infrastructure and utilities companies Snam, Italgas and Terna and whose 35% is in the hands of the Chinese public giant State Grid Corporation of China.
- Meanwhile, Italy is mulling whether to exit the Belt and Road Initiative altogether – and although Prime Minister Giorgia Meloni has signalled she’s leaning towards dropping out, she has remarked that talks are still ongoing and no decision has been taken yet.
