Ex-Italian Prime Minister Berlusconi loses dispute over bank shares

LUXEMBOURG (CN) — Siding with the European Central Bank, the European General Court agreed Wednesday that Silvio Berlusconi's shares in an Italian bank can be confiscated because of a tax evasion conviction. 

The European Union’s second-highest court ruled in favor of the ECB and the Bank of Italy, which decided in 2016 to confiscate Berlusconi’s shares in an Italian bank, acquired following a merger, because the former Italian prime minister had been convicted of tax fraud three years earlier. 

“He did not meet the reputation requirement applicable to those with qualifying holdings,” the Luxembourg-based court wrote in a press release. The ruling was not available in English by press time.

Berlusconi, who was once Italy’s richest man, earned his wealth creating an Italian media empire. His company, Fininvest, is worth some $5 billion and owns a controlling stake in the country’s largest broadcaster, Mediaset, and publisher, Mondador. Following a merger in 2015, Fininvest acquired a 30% in Banca Mediolanum, an Italian insurance and asset management company. 

The following year, both the Italian and European central banks moved to suspend the former politician’s voting rights in Banca Mediolanum and seize his stake in the company, arguing he didn’t meet “the reputation requirement.” It was not his notorious "bunga bunga" sex parties, nor his conviction for hiring an underage sex worker, but rather a conviction for tax evasion that led to the intervention. 

The 85-year-old has had numerous run-ins with the authorities. His earliest conviction was for perjury in 1989 and he’s since faced charges of abuse of office, bribery, corruption, collusion, defamation, embezzlement, extortion, false accounting, money laundering, perjury, tax fraud, underage prostitution influence and witness tampering.

In 2013, he was convicted of tax fraud for buying TV rights at artificially inflated prices through a series of holding companies in an effort to avoid paying taxes in Italy. The conviction resulted in a four-year jail sentence, a five-year ban from holding public office and expulsion from his seat in parliament.

A month later, he would also be convicted of paying for sex with a minor. An Italian court sentenced him to seven years in jail and barred him from public office for life after finding he had paid a 17-year-old girl for sex on more than a dozen occasions, some while he was serving as prime minister. 

Under the Capital Requirements Directives, a series of EU regulations governing financial institutions, the ECB can block the sale of shares in banks if the owners could have a negative impact on the company’s bottom line. 

In a statement, Fininvest called Wednesday’s decision “seriously flawed” and said it plans to appeal. It’s the second time the dispute has landed at the General Court. In 2018, the same court ruled it alone had the power to review ECB decisions. 

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