Mister Chairman,
Ladies and Gentlemen Directors and Statutory Auditors,
Ladies and Gentlemen Shareholders,
For those who were not present at previous meetings, my name is Rosario Marcone and I represent Deminor Recovery Services, a company active in the field of investor protection and corporate governance.
Deminor promoted and assists the group of 64 institutional investors that on 28 April 2015 filed a recovery action against Saipem before the Court of Milan for damages caused by the Company through the communication of inaccurate information to the market, as well as the unlawful delay in the publication of privileged information in its possession.
The purpose of my intervention is to ask clarifications on what the Company has stated in the section “Court of Cassation - Consob Resolution No. 18949 of June 18, 2014 - Actions for damages” of the paragraph “Legal Proceedings” of the 2016 Annual Report.
On 31 December 2012 Saipem capitalized EUR 12.98 billion. Following the announcement of the first profit warning on 29 January 2013 the shares suffered a loss of 34.29%, from EUR 30.45 to a value of EUR 20.01, representing more than EUR 4.5 billion of the Company’s market capitalization. After the second profit warning on 14 June 2013 the shares suffered a further loss of 29.19%, from EUR 20.11 to EUR 14.24, representing more than EUR 2.5 billion of market capitalization.
As a confirmation of the fact that the accounting of revenues in previous years was excessively “generous”, the new Board of Directors, still in office, continued the “cleaning of the accounts” admitted by the former CEO of ENI, Paolo Scaroni, to the former Minister for Economic Development, Corrado Passera, the day after the first profit warning, in the now known wiretapping reported by the press. And in fact, on 28 July 2015, on the occasion of its first quarterly report, the third profit warning was announced, with a heavy write-down of EUR 929 million. On 25 October 2016, the BoD announced write-downs of over EUR 2 billion!
Meanwhile, since the closing last year in February of the disastrous EUR 3.5 billion over-diluting capital increase which almost reduced to zero the value of the Company before the operation, the stock price remained practically steady at EUR 40 cents, corresponding to around EUR 4 billion of market capitalization.
Here are some questions that I kindly ask to answer:
- What is the total value of the write-downs attributable to low-margin contracts which the market first learned about on 29 January 2013?
- Is it possible to confirm that this amount of write-downs refers exclusively to contracts signed in the years from 2009 to 2012?
- In an interview with Il Sole 24ore on 28 April 2016 the CEO, Ing. Cao, sustained that the Company in order to boost volumes has “concluded a number of contracts with unsatisfactory margins and, in some cases, negative, but fortunately, we are digesting them and we are now in the queue of this path.” Ing. Cao can you kindly clarify:
a. To which contracts were you referring to?
b. When and in which countries were they assigned?
c. What is the negative margin that they generated altogether?
4) Has the “cleaning of the accounts” ended or it is necessary to wait for the appointment of a new BoD for the announcement of further write-downs?
5) As for the investigations being conducted by the Public Prosecutor's Office at the Court of Milan against Saipem with reference to the allegation of unlawful administrative acts under Legislative Decree No. 231/2001, I ask the Board of Directors to specify:
- On what date the Company received notification of the “Request to extend the deadline for preliminary investigations”;
- Did the defendants get prior notice of any other measures taken relating to the ongoing investigations?
