Unsettling Events Continue to Sweep Through The Italian Sea Group

The corporate turbulence at The Italian Sea Group (TISG) is escalating at a breakneck speed. CEO and Chairman, Giovanni Costantino lodged a criminal complaint on 9th March against several former top-ranking executives, alleging deception. Amidst tumultuous accusations, strikes spurred by wage non-payment, a rather hasty €25 million bailout, boardroom re-shuffling and plummeting share prices, the storm rages on.

Costantino claims that the key management personnel in question conspired with intention to mislead the CEO with falsified reports, including cash flow projections, bank statements, and project budgets. The evidence, filed at the Public Prosecutor’s Office at the Court of Massa, alleges these actions obstructed the CEO’s grasp of the true financial state of affairs.

This announcement is merely the latest in a flurry of events starting mid-February with the disclosure of unexpected costs spanning across most of TISG’s ongoing projects. The financial stress considerably delayed employee salaries, triggering a strike at the Marina di Carrara yard. On top of it all, a video surfaced showing Costantino bluntly accusing certain managers of disloyalty and reckless overspending.

Costantino personally funded a €25 million interest-free shareholder loan via his firm, GC Holding, which holds a 53.6% stake in TISG. This substantial cash infusion is not due for repayment until the end of 2032. In response, TISG engaged global audit firm KPMG to perform an independent review of the overrun costs. Preliminary findings are expected in mid-April.

TISG shares have endured a sharp decline in recent times, a downward trend that the business never quite recovered from. Adding to the unrest, an executive exodus saw Chairman Filippo Menchelli and Vice Chairman Marco Carniani categorically resign. Both executives aimed to protect their ‘honour and professional reputation’, alluding to friction with the CEO during a board meeting.

Through the tumult, TISG continues sailing its troubled waters. The exact fallout from these choppy seas remains to be seen.