By Manuela Mesco
MILAN--Pietro Varone, a former senior executive of Italian oil
company Saipem (SPM.MI), was put under preventive detention in late
July as part of an investigation involving Saipem, Italian tax
police said Tuesday.
The measure is the latest development into a probe against
Saipem, Italy's biggest oil-service company by market value, which
started last year.
Mr. Varone, former chief operating officer of Saipem's
engineering and construction business unit, denies any wrong-doing.
He was put under detention for allegedly having had a role in
bribery activities on behalf of Saipem, allegedly aimed at winning
contracts in Algeria, although no formal accusation has been made
yet as the investigation is still ongoing, one of his lawyers said
Tuesday. He added that lawyers will ask to convert the measure into
house detention.
Saipem said Tuesday that it wouldn't comment on Mr. Varone's
detention as he's no longer with the company. Mr. Varone was in
fact suspended last December, as he emerged as a possible suspect
in the corruption probe.
The Italian oil company, partially controlled by Eni (E) with a
43% stake, said in December it was being investigated by Italian
prosecutors over possible corruption involving some Algerian
contracts. Last month it completed an internal investigation that
found no evidence of illegal payments to Algerian officials,
although it discovered violations of internal procedures. Milan
prosecutors haven't formalized any of their allegations as
investigations are still ongoing.
The probe in Milan is an offshoot of inquiries by Algeria into
its oil industry, which led to the departure of the top management
of state-owned oil giant Sonatrach (SON.YY) in 2010. The biggest
Saipem contract scrutinized in the Algerian inquiries was to build
the GK3 gas pipeline and was worth $580 million, people familiar
with the matter have previously said. Saipem won the contract in
northeast Algeria in 2009.
Algerian Energy Minister Youcef Yousfi has previously said
Saipem could be blacklisted from state-oil contracts if found
guilty of corruption. But a Sonatrach official said it was still
allowed to bid for deals for now because the investigations are
ongoing.
The company has been frequently under the spotlight for alleged
bribery in recent months. In July, a court in Milan has fined
Saipem 600,000 euros ($780,000) and ordered the confiscation of
EUR24.5 million of assets after it was found guilty of corruption
in Nigeria.
(Benoit Faucon in London contributed to this article.)
Write to Manuela Mesco at manuela.mesco@wsj.com