Pirelli defends US compliance proposal amid tensions with Sinochem

Milan, Italy – Pirelli & C. SpA has defended its proposed measures to address US compliance concerns following criticism from its largest shareholder, Marco Polo International Italy – a Sinochem investment vehicle.

Last month, Pirelli announced that it was ending major shareholder Sinochem’s ‘control’ of the company in order to safeguard its US market position. (ERJ report)

In a 15 May release, Pirelli said “contrary to what has been asserted,” its proposal was formulated 'in the best interests of the company and respectful of all shareholders.'

The comment came in response to a Marco Polo statement, which according to a Reuters report called the proposal “potentially disruptive" for Pirelli and unfair to shareholders.

In its response, Pirelli said that while Marco Polo had sent alternative proposals to the Italian government's 'golden power' office it “refused to share” the details with the group's management.

Pirelli went on to say that its “excellent results” over the years reflected the right strategies adopted by its management which created value for all shareholders, including Sinochem.

The Italian group said it “remains open to exploring solutions that will allow it full compliance with the rules also in the American market."

Pirelli "will continue to do all within its power to protect the company’s development in such a strategic market at that of the US,” it added.

Among the issues facing Pirelli in the region are intensifying scrutiny by the Washington administration and restrictions on China-linked software and hardware used on US roads.