By Daniele Lepido and Haze Fan (Bloomberg) The ongoing conflict between Ferretti SpA, an Italian luxury yacht maker, and its leading Chinese investor is gaining attention again, just a year after a previous spying scandal shook the company.
Weichai Group, which holds a 37.5% stake in Ferretti, claims that CEO Alberto Galassi is marginalizing its directors to strengthen his control over the company. This information comes from sources familiar with the situation and an internal document seen by Bloomberg News that was sent last month by Weichai to its parent company.
The document states that directors associated with Weichai have been excluded from Ferretti's headquarters in Forlì. They are "effectively cut off" from the main operating environment of the company and are only performing occasional, minor tasks at the Milan office. It highlights a recent management change that consolidates decision-making power in Galassi's hands, indicating that he has "effectively achieved full control over Ferretti."
"As investors, we shareholders are very worried about the security of assets and the quality of operations," Weichai expressed in the document.
A representative from Ferretti did not provide comments, and officials from Weichai did not respond to requests for feedback. The document does not specify what actions Weichai, as Ferretti's largest shareholder, plans to take in light of these developments.
These allegations add another layer to a story that last year placed Ferretti in the middle of an alleged spying episode where its Chinese executives were targeted, leading to a Milan investigation. In June, Bloomberg News reported that hidden listening devices were discovered in the Milan offices of the company's Chinese executives during a time of tension between management and the primary shareholder concerning a share buyback strategy. The investigation into this spying incident is still ongoing.
The unrest at Ferretti occurs while the Italian Prime Minister Giorgia Meloni's administration is adopting a more careful stance towards Chinese investments in critical Italian companies amid rising geopolitical tensions and global trade issues.
Even though Weichai hasn't faced any interference from the Italian government, its situation draws similarities to that of tire manufacturer Pirelli SpA, where China's state-owned Sinochem Group had to limit its governance role due to a 2023 decree under Italy's "golden power" law. This law, designed to protect assets deemed strategic, is becoming crucial in how Rome manages its economic relations with Beijing while also reassuring domestic and European partners.
Ferretti is recognized worldwide for its luxury yachts, housing well-known brands like Riva, Pershing, and Wally. The company reported approximately €1.2 billion ($1.4 billion) in revenue last year and has been working to grow its global order book.
The Italian firm went public in Hong Kong in 2022 and added a listing in Milan the following year. Since then, its stock has seen a decline of about 4% in the Milan market.