Outgoing CDP chairman denies refusing to invest in Telecom Italia

Reuters

MILAN (Reuters) - The outgoing chairman of Italian state lender Cassa Depositi e Prestiti (CDP) denied on Saturday he was losing his job due to a refusal to invest in Telecom Italia.

Franco Bassanini and CDP CEO Giovanni Gorno Tempini will be replaced in July at the helm of the financing agency at the behest of the Treasury, which owns 80 percent of CDP.

Sources close to the matter had told Reuters Prime Minister Matteo Renzi wanted CDP's management out due to rifts over the level of support it should provide to struggling firms and to foster crucial investments in infrastructure.

Italian media said one cause of friction was that Bassanini had refused to make a direct investment in Telecom Italia. But he told reporters on the sidelines of a Milan conference this was not true.

"The Treasury, CDP's foundation shareholders and the government have never asked CDP to buy Telecom Italia shares," Bassanini said.

A multi-billion euro plan by Renzi to build a nationwide broadband network has run into difficulties over the role Telecom Italia should play in it

Sources have said the government held CDP partly responsible for the stalemate and that the lender could play a more active role in the economy in the future.

Bassanini said in May Italy would be punished by financial markets and risk breaking European Union rules if it took a stake in Telecom Italia.

On Saturday he said CDP had opposed requests by previous governments to invest in troubled bank Monte dei Paschi di Siena and ailing flagship carrier Alitalia, but had "never said 'no' to the Renzi government."

He played down talk of disagreements with Renzi, saying CDP had met the targets of its 2013-2015 business plan and it made sense for a new board to work on the next one.

Bassanini will be replaced by former Goldman Sachs banker Claudio Costamagna.

Renzi has made the development of a fibre-optic network in Italy one of the priorities of his 16-month-old government. But the plan, centring around fibre-optic company Metroweb [SSCPTM.UL], in which CDP holds an indirect stake, has so far failed to take off.

Bassanini said he would continue to be Metroweb's chairman while also working with the government as an adviser over the broadband project.

(Reporting by Francesca Landini; Writing by Valentina Za; Editing by Gavin Jones and David Holmes)