Tenaris Shares Plunge in Italy as Billionaire Chairman Indicted

(Bloomberg) -- The Argentine judge overseeing an investigation into the so-called notebook scandal has indicted billionaire Paolo Rocca as part of a graft case. Shares of steel pipe-maker Tenaris SA, in which he is the majority shareholder, plunged in Italy.

Tenaris Shares Plunge in Italy as Billionaire Chairman Indicted

The judge set a $103 million bond and forbade Rocca from leaving the country. Shares of Tenaris dropped as much as 9.3 percent to 10.64 euros in Milan on Wednesday, its lowest price since April 2016. They fell as much as 11 percent in New York Tuesday. Rocca, whose net worth is estimated at $8 billion at Bloomberg Billionaire’s index, lost more than $100 million on Tuesday’s stock drop.

Keep Calm Over Tenaris Chairman Indictment, Investors Urged

The ruling, which was reported earlier by Clarin, was confirmed by a clerk at judge Claudio Bonadio’s court who asked not be identified as the investigation is ongoing. Tenaris spokeswoman Stefania Argento said in a telephone interview that she had no immediate comment. Trading of steelmaker Ternium SA, which is also majority-owned by Rocca, was halted in the New York Stock Exchange.

Tenaris’s board has been monitoring the situation in consultation with its legal advisers and, after a review of the judge’s decision, has confirmed Rocca as chairman and chief executive officer, it said in a statement.

Tenaris Shares Plunge in Italy as Billionaire Chairman Indicted

The judge charged Rocca after the Argentine billionaire testified that one of his company’s executives paid an undisclosed amount of cash to government officials in monthly installments from 2009 to 2012. The officials were allegedly working for then-President Cristina Fernandez de Kirchner’s administration to speed up a compensation payment from Venezuela’s Hugo Chavez for the nationalization of Sidor, a unit that had been seized by Venezuela. Rocca’s group was compensated with $1.95 billion for the unit.

The move comes as Bonadio probes hundreds of alleged bribes paid by construction companies, energy suppliers and electricity generators to members of the former government. The case, known as the "notebook scandal" after a series of notebooks belonging to a driver for the former deputy secretary for planning, who kept records of names, amounts, addresses and dates of alleged bribes paid between 2005 and 2015.

Bonadio also ruled he had no evidence to file charges against Pampa Energia chairman and majority owner Marcelo Mindlin. Spokesman Jorge Azcarate didn’t reply to messages seeking comment. Pampa Energia shares pared declines.

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