{"id":141767,"date":"2020-12-26T00:16:01","date_gmt":"2020-12-25T21:16:01","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/aerospace-giants-convict-ceo-could-pose-threat-to-firms-ipo-plans\/"},"modified":"2020-12-26T00:16:01","modified_gmt":"2020-12-25T21:16:01","slug":"aerospace-giants-convict-ceo-could-pose-threat-to-firms-ipo-plans","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/aerospace-giants-convict-ceo-could-pose-threat-to-firms-ipo-plans\/","title":{"rendered":"#Aerospace giant\u2019s convict CEO could pose threat to firm\u2019s IPO plans"},"content":{"rendered":"

“#Aerospace giant\u2019s convict CEO could pose threat to firm\u2019s IPO plans<\/strong>”
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A politically charged standoff over an Italian aerospace giant\u2019s convicted fraudster CEO is now threatening to hit America\u2019s shores.<\/p>\n

Leonardo SpA \u2014 a massive defense contractor that sells everything from missiles to cybersecurity services \u2014 is considering a stock listing for its US subsidiary, Leonardo DRS, which does business with the Pentagon. <\/p>\n

The IPO talks come as the company comes under fire in Italy because its CEO, Alessandro Profumo, is staring down a six-year prison sentence and resisting calls to step down as he app<\/a>eals the verdict.<\/p>\n

The politically connected Profumo, who\u2019s reportedly earned the nickname \u201cMr. Arrogance\u201d for his aggressive style, was convicted in an Italian court in October of false accounting and market manipulation for his role in an accounting scheme at a separate company.<\/p>\n

But Leonardo has stood by him, arguing that the 63-year-old CEO\u2019s conviction is not final and \u201centirely unrelated\u201d to his current employer.<\/p>\n

\u201cTherefore, as far as Mr. Profumo\u2019s legal concerns are related, we can reiterate that the Leonardo board reaffirmed their confidence in Mr. Profumo\u2019s leadership last October and this will have no impact on his continued ability to lead the group,\u201d the Rome-based firm told The Post in a statement.<\/p>\n

Leonardo \u2014 the world\u2019s 11th-largest arms merchant with about $11 billion in weapons sales last year, according to the Stockholm International Peace Research Institute \u2014 is also seeking to grow its US business, according to Reuters, which reported last month<\/a> that the Italian parent intends to maintain control of DRS, the unit exploring a US listing. <\/p>\n

DRS \u2014 which Leonardo acquired in 2008 \u2014 already makes up a big chunk of the Italian parent\u2019s business, with about 1.7 billion euros (roughly $2.1 billion) in revenue for the first nine months of the year, accounting for some 19 percent of Leonardo\u2019s total.<\/p>\n

The US Department of Defense has been asked to weigh in, but has yet to respond, according to Giuseppe Bivona, a partner at London-based hedge fund Bluebell Capital Partners, who wrote to the Pentagon on Oct. 27.<\/p>\n

\u201cIf the CEO of a US listed company was sentenced to jail, his\/her resignation (pending appeal) would be immedia<\/a>te and irrevocable,\u201d Bivona\u2019s letter read. <\/p>\n

\u201cThere is a reputational issue, [a] suitability issue,\u201d Bivona told The Post. \u201cIf your main client is the US Department of Defense \u2026 I can tell you that they\u2019re going to pick up the phone and ask you, \u2018What the hell is going on?\u2019\u201d<\/p>\n

Bivona \u2014 who helped uncover the fraud Profumo allegedly committed at Banca Monte dei Paschi di Siena, an Italian state-owned bank \u2014 said he hasn\u2019t heard back from the Pentagon, which also didn\u2019t respond to The Post\u2019s request for comment.<\/p>\n

Bivona \u2014 who is advising an institutional fund that\u2019s suing Monte dei Paschi di Siena \u2014 claims Profumo is being protected by his ties to Italy\u2019s Democratic Party, a plank of the coalition government that controls the Ministry of Economy and Finance, which is also Leonardo\u2019s largest shareholder.<\/p>\n

But pressure also appears to be mounting in Italy where Profumo has also been blasted by lawmakers on both sides of Italy\u2019s parliament. The ruling 5 Star Movement party urged him to step down soon after he was convicted, while Matteo Salvini, head of the opposition League party, has said he could weaken Leonardo\u2019s business.<\/p>\n

\u201cIt is difficult to take home orders from across the world with a managing director sentenced to six years,\u201d Salvini said in a Dec. 10 speech.<\/p>\n

Profumo joined Leonardo in 2017 after a banking career that landed him at Italian bank Monte dei Paschi di Siena, where he was chairman. He developed a reputation as an aggressive dealmaker, reportedly earning the nickname \u201cMr. Arrogance\u201d along the way.<\/p>\n

US experts say the Leonardo scandal has the potential to create bumps in the defense contractor\u2019s road to a US listing.<\/p>\n

\u201cI\u2019d be shocked if any self-respecting investment bank would partner with them and take them public pending this state of affairs,\u201d Shivaram Rajgopal, an accounting and auditing professor at Columbia Business School, told The Post.<\/p>\n

Profumo\u2019s conviction wouldn\u2019t legally bar Leonardo DRS from going public in the US, but the company would very likely have to disclose the situation in its filings with the Securities and Exchange Commission, a disclosure that could raise eyebrows among investors.<\/p>\n

\u201cEven if he\u2019s a great guy and all that, if he\u2019s out of pocket and is put in jail and the company relies upon him, that\u2019s a pretty significant risk factor,\u201d noted Francis Curran, a securities litigation attorney at Manhattan law firm Kudman Trachten & Aloe.\n <\/p><\/div>\n

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Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

“#Aerospace giant\u2019s convict CEO could pose threat to firm\u2019s IPO plans” A politically charged standoff over an Italian aerospace giant\u2019s convicted fraudster CEO is now threatening to hit America\u2019s shores. Leonardo SpA \u2014 a massive defense contractor that sells everything from missiles to cybersecurity services \u2014 is considering a stock listing for its US subsidiary,…<\/p>\n","protected":false},"author":1,"featured_media":141768,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2020\/12\/ceo-conviction-threatens-ipo.jpg?quality=90&strip=all&w=1200","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[87761,11154,75698,72349,71006,5007,71007,78432],"class_list":["post-141767","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-12-25-20","tag-ceos","tag-contractors","tag-convictions","tag-fraud","tag-ipo","tag-scandals","tag-the-pentagon"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/141767","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=141767"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/141767\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/141768"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=141767"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=141767"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=141767"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}