ROME (Reuters) -Proxy adviser Frontis Governance has urged shareholders in Enel to back a list of candidates for the new board promoted by the hedge fund Covalis and reject names put forward by the Treasury, a report seen by Reuters showed.
Investors in Italy’s Enel, one of Europe’s biggest utilities, vote on May 10 to appoint the new board.
The Treasury owns 23.6% of Enel and has faced a growing investor rebellion over the nominees it put forward this month, including its suggestion for chairman — Paolo Scaroni, a former boss at Enel.
Covalis Capital, which holds around 1% of the Italian energy group, has proposed former top banker Marco Mazzucchelli for the chairmanship and presented a slate of independent candidates as an alternative to the government-backed names.
In a statement released on Sunday, Frontis said the report was prepared for a single costumer, adding that it did not necessarily reflect the analysis carried out for other institutional investors.
The report seen by Reuters showed Frontis is a partner of Switzerland’s Ethos, a group of pension funds and other investors.
“Taking into account the level of independence of each slate, diversity and professional competencies of the nominees, we recommend to cast a NO VOTE for the slates submitted by the (Treasury),” Frontis wrote in the report.
Covalis, a London-based hedge fund, has complained of an “opaque process” regarding Enel, adding it was unclear “what the government’s proposed slate stands for or what their plan is”.
However, it has not put forward an alternative to the Treasury’s nominee for the CEO post — Flavio Cattaneo, a former chief at power grid operator Terna who is currently at high-speed train operator Italo.
(Reporting by Giuseppe Fonte, Editing by Crispian Balmer)
