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Pirelli’s board has voted to strip Chinese conglomerate Sinochem, its single largest shareholder, of control over the Italian tyre company amid clashes over its governance.
The Milan-based group on Monday said the board had backed a proposal that the Chinese group be no longer regarded as a controlling shareholder, despite having a 37 per cent stake and was considered a controlling shareholder for regulatory purposes.
The move follows years of disputes over governance at Pirelli, which has included Prime Minister Giorgia Meloni’s government imposing limitations on state-owned Sinochem’s shareholder rights in the tyre company.
Pirelli’s former chief executive Marco Tronchetti Provera, who is the company’s second-largest shareholder with a 26 per cent holding through investment vehicle Camfin, last month unsuccessfully tried to convince Sinochem to sell down its stake.
Under international accounting standards a minority shareholder can be considered a controlling shareholder for regulatory purposes if its exercises dominant influence over a company.
Pirelli this year asked Italian financial regulator Consob to clarify whether Sinochem was still considered its controlling shareholder after the government’s move two years ago, but the regulator said it was up to the board to make such a determination.
The board decision was endorsed by nine out of 15 members, including executive vice-chair Provera and chief executive Andrea Casaluci.
Chair Jiao Jian, who is also the president of Sinochem, opposed the decision, Pirelli said. Sinochem said it was “dismayed and firmly opposed the decision”.
The Italian and Chinese board members have been at odds for some time, and the tensions were further heightened by US President Donald Trump’s trade war with China and its implications for Pirelli’s American expansion.
The vote on Monday will not force Sinochem to sell down its stake and Pirelli’s management acknowledged it was just “a first, but not decisive, step on the path to the necessary adjustment of company governance to regulatory constraints in the USA”.
Washington in January finalised a ban on Chinese automated driving systems as well as hardware and software that interact with cars, such as Bluetooth, WiFi and satellite.
Pirelli’s proprietary technology, which can link information picked up by tyre sensors to driving commands, is in high demand in the US but the group feared being shut out of a lucrative market because of Chinese control.
The board’s decision followed Rome’s move in 2023 to limit the parent company’s access to Pirelli’s technology and data. At the time, Italy’s government also barred Sinochem from appointing the group’s CEO indefinitely, citing national security concerns.
