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. Last Updated: 07/27/2016

Telecom Italia Chairman Steps Down

MILAN, Italy -- Telecom Italia's chairman resigned Friday, an apparent victory for the company's main shareholder as it seeks to negotiate the sale of a two-third stake of its TI holdings to U.S. telecom giant AT&T and its Mexican affiliate.

A Telecom Italia statement said the resignation of Guido Rossi was effective immediately.

Rossi had been chairman since September but had lost the support of Telecom Italia's controlling shareholder, Olimpia, a holding company set up by the tire maker Pirelli & C. and apparel maker Benetton.

Earlier in the week, Olimpia omitted Rossi's name from a list of proposed new board members before a shareholders' vote on April 16. That omission would have made it difficult, if not impossible, for Rossi to maintain control of the company.

Rossi initially signaled he would counter the move, but he appeared resigned to his fate in an interview with the Rome daily La Repubblica published on Friday, saying he did not plan to show up at the shareholders meeting.

Rossi, who once ran the stock market regulatory agency and was appointed soccer commissioner to steer the game through last year's scandals, became chairman in September after Marco Tronchetti Provera resigned in a dispute with the government over the company's future.

Rossi told La Repubblica that the two came to loggerheads over Rossi's attempts to clear up conflicts of interest in the company.

"We started on a collision course when I tried -- for the well-being of the company, the market and the country -- to address conflicts of interest between Tronchetti and Telecom. I became dangerous for him, and I needed to be eliminated," Rossi was quoted as saying.

Rossi criticized Olimpia for only informing him the night before it made its list public that he would not be included, saying it "lacked style."

Rossi's resignation comes as Olimpia is negotiating to sell two-thirds of its 18 percent stake in Telecom Italia to U.S. telecommunications company AT&T. and its Mexican affiliate -- with the possibility of the sale of the final third after a year. The talks remain exclusive until the end of the month.

The negotiations have raised concerns in Rome about a strategic national asset falling into the hands of foreigners.

Rossi has not commented publicly on the talks nor have there been any signs he was consulted.

Under the Telecom Italia statutes, Olimpia nominates four-fifths of the board, while minority shareholders nominate the remaining fifth.

While Rossi's name was excluded, the names of the current CEO, Riccardo Ruggiero, and deputy chairman Carlo Buora were included on Olimpia's list of 17 names.

Italian media have reported that Olimpia will seek to name as chairman Pasquale Pistorio, the former head of the SGS Group, the only Italian microelectronics company. Pistorio's name also was on the list.