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Italian police arrest former bank boss Gianluca Baldassarri Italian police arrest former bank boss Gianluca Baldassarri
(35 minutes later)
Italian police have arrested the former head of Monte dei Paschi's finance department in an inquiry into alleged fraud and bribery at the world's oldest bank. Italian police have arrested the former head of Monte dei Paschi's finance department in an inquiry into alleged fraud and bribery at the world's oldest bank. Gianluca Baldassarri is the first person to be arrested in a widening scandal that has rocked Italy's third largest bank and triggered a financial and political storm ahead of national elections on 24 February.
Gianluca Baldassarri is the first person to be arrested in a widening scandal that has rocked Italy's third largest bank and triggered a financial and political storm ahead of national elections on 24 February.
Prosecutors in the Tuscan city of Siena, where the 540-year-old bank is based, said Baldassarri was accused of helping mislead regulators over the true nature of a secret derivative contract that was found in a safe by the bank's new management in October 2012.Prosecutors in the Tuscan city of Siena, where the 540-year-old bank is based, said Baldassarri was accused of helping mislead regulators over the true nature of a secret derivative contract that was found in a safe by the bank's new management in October 2012.
Prosecutors have also sent a written request to speak to Santander Chairman Emilio Botin as a witness as part of their probe, a judicial source said.
In a statement, the prosecutors said Baldassarri was detained in Italy's financial capital Milan because they feared he might leave the country. His home in Milan was being searched, the statement added.In a statement, the prosecutors said Baldassarri was detained in Italy's financial capital Milan because they feared he might leave the country. His home in Milan was being searched, the statement added.
Contacted by Reuters, Baldassarri's lawyer, Filippo Dinacci, declined to comment. Contacted by Reuters, Baldassarri's lawyer, Filippo Dinacci, declined to comment. Baldassari left Monte dei Paschi shortly after the arrival of new chief executive Fabrizio Viola in January 2012.
Baldassari left Monte dei Paschi shortly after the arrival of new chief executive Fabrizio Viola in January 2012.
Prosecutors in Siena are investigating accusations of corruption in Monte dei Paschi's costly acquisition of smaller rival Antonveneta in 2007, as well as a series of loss-making derivative and structured finance trades dating back to 2006-09, which the bank says it discovered only last October.Prosecutors in Siena are investigating accusations of corruption in Monte dei Paschi's costly acquisition of smaller rival Antonveneta in 2007, as well as a series of loss-making derivative and structured finance trades dating back to 2006-09, which the bank says it discovered only last October.
The bank's former managers, who are being questioned by magistrates, have declined to comment. Italian prosecutors seized some €40m last week as part of their investigation. The prosecution seizure order, seen by Reuters, said the funds belonged to Baldassarri and four other people suspected of criminal conspiracy to commit fraud.The bank's former managers, who are being questioned by magistrates, have declined to comment. Italian prosecutors seized some €40m last week as part of their investigation. The prosecution seizure order, seen by Reuters, said the funds belonged to Baldassarri and four other people suspected of criminal conspiracy to commit fraud.
The scandal has raised questions over the future of the bank, which last month won final approval for a €3.9bn state bailout.The scandal has raised questions over the future of the bank, which last month won final approval for a €3.9bn state bailout.