The Bank of Italy has flagged money-laundering risks at DeA Capital Real Estate SGR and is demanding a remedial plan, a new business strategy, and a sweeping overhaul of the asset management firm’s leadership, Il Sole 24 Ore reported.

The Italian financial daily reported that the central bank has called on the company’s board of directors and board of statutory auditors to jointly convene a shareholders’ meeting. The agenda is to include an assessment of the company’s anti-money-laundering (AML) violations, including the supervisor’s call for urgent corrective action, and the replacement of a majority of board and statutory auditor members.

That overhaul, according to Il Sole 24 Ore, would include the removal of Chairman Gianluca Grea and Managing Director Emanuele Caniggia. The replacements must not have previously held offices or operational roles at the SGR, and the new board must include at least one director with strong AML expertise, the regulator demanded.

The newspaper reported that DeA Capital Real Estate SGR’s current board also includes Daniela Becchini, Stefania Boroli, Gianandrea Perco, Severino Salvemini, and Andrea Casarotti. Gian Piero Balducci chairs the supervisory board, with statutory auditors Barbara Castelli and Annamaria Esposito Abate, and alternate auditors Fabiana Basile and Gianni Poggi.

The Bank of Italy also requested a comprehensive action plan with guidelines including measures to remedy the inspection findings, an assessment of the firm’s organizational structure and staffing of control functions, and a new business plan that takes into account higher costs, Il Sole 24 Ore reported.

In addition, the central bank has asked the asset management company to refrain from launching new funds aimed at non-institutional clients, the news outlet said. However, the firm retains the ability to continue its existing activities, including establishing new funds for professional investors. 

DeA Capital Real Estate SGR is an asset management company specializing in alternative real estate investment funds, with approximately €12 billion in assets covering a total of 5-million square meters, the newspaper said. It manages 50 real estate funds, one of which is listed on the Milan exchange’s MIV segment. 

Read more at Il Sole 24 Ore