By Manuela Mesco
MILAN--Italy's market securities regulator Consob started
procedures to sanction oil company Saipem SpA (SPM.MI) for
irregularities in its 2012 accounts, it emerged on Tuesday.
Consob found a number of irregularities in the way Saipem gave
notice of its two recent profit warnings and on the company's 2012
accounts. The irregularities found by Consob were described in
Saipem's first-half report published on Tuesday.
Consob found irregularities in relation to eight contracts
awarded to Saipem. Some of these resulted in a total of 130 million
euros ($172.9 million) net loss that Saipem failed to account for,
but which should be included in 2013 accounts, according to
Consob.
The figure adds to a EUR500 million loss that the oil company
accounted for when it issued one of its recent two profit warnings,
impacting the company's 2013 guidance. According to the regulator,
the EUR500 million should have been accounted for in 2012 accounts,
instead.
Consob says that Saipem have been notified in the last weeks of
such irregularities and the company has now a maximum of 360 days
to explain its reasons. After the term, Consob will decide whether
to sanction the oil company, but a spokesman could not detail the
entity of the potential sanction.
A Saipem's spokesman said Tuesday that the company is working to
demonstrate the criteria it used for its accounts have been rightly
put in place.
Saipem issued two profit warnings in six months, the second of
which came in June. It posted a second-quarter net loss of EUR685
million and an operating loss of EUR670 million as revenue slipped
36% to EUR2.10 billion.
Milan-based Saipem, which is controlled by oil company Eni SpA
(E), has been in the spotlight in recent months after it announced
in December that it was being investigated by Italian prosecutors
over possible corruption involving some Algerian contracts. Saipem
denied any wrongdoing.
Two weeks later, Saipem shocked investors by reducing 2012
earnings guidance and indicating a gloomy outlook for this year.
The sudden change came after months of assurances that the company
was optimistic over earnings.
Write to Manuela Mesco at manuela.mesco@wsj.com
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