Milan – Italy has initiated an administrative process against Sinochem, the foremost shareholder of Pirelli, one of the leading tire manufacturers in the country, amid concerns regarding potential violations of regulations aimed at safeguarding national interests.

On Wednesday, Pirelli disclosed that this action comes under the “golden power” framework, which imposes certain information access limitations and elevated voting thresholds related to critical corporate decisions, a regulation introduced by the Italian government in mid-2023.

Sinochem, which possesses a 37% ownership stake in Pirelli, has denied any breach of these stipulated rules. According to Pirelli, the Italian authorities have a span of 120 days to arrive at a conclusion regarding this matter.

In justifying the enactment of the golden power provisions, the government emphasized the significance of the technology involved in tire sensors that are capable of accumulating crucial data such as road configurations, geographic positioning, and the condition of related infrastructures. This technology has been deemed vital for national interests.

Pirelli is also supported by Camfin, the investment firm managed by Marco Tronchetti Provera, who is the former CEO and currently serves as executive vice-chairman. Camfin holds a 32.4% share in the tiremaker, making it the second-largest stakeholder.