Three government officials said that Italy is investigating whether China's investors in Ferretti yacht manufacturer violated golden power rules designed to protect strategic?assets, by failing to reveal their full?"shareholding"?to Italian authorities.

KKCG Maritime, a Czech investor, urged the Czech government this month to act in response to a feud where Ferretti shareholders sided with China's Weichai Group and ended Alberto Galassi’s 12-year tenure at the helm of the company. Stassi Anastassov was appointed to replace him.

Galassi was ousted at a shareholder meeting held on May 14, 2014 to decide whether Ferretti's control should remain with Weichai as its largest shareholder or if it should?shift to a list of appointees backed up by KKCG.

The sources, who asked to remain anonymous, said that the office of Prime Minister Giorgia Meloni is investigating whether investors acting "alone or together" have purchased Ferretti shares, or increased their stakes, without notifying the authorities, as required.

According to Italian law, the cabinet must approve ownership of shares in any 'Milan listed strategic company' that owns defence or security assets when they cross thresholds at 3%,5%, 10%, and 15%, as well as other intervals between 3% and 50%.

Anastassov, when asked to comment, said he focused on managing Ferretti's business and relationships with its partners. He added that he wasn't involved in any matters within the board's jurisdiction.

Italian business paper MF reported that before the meeting, Bank?ofChina had acquired a stake in Ferretti of about 2%.

At the meeting on May 14, the yacht manufacturer disclosed all shares above 5%. Ferretti will release the minutes detailing the total shareholder base and relative stakes at a later date.

Ferretti controls seven yacht brands including Riva, Wally and a small division that produces patrol vessels. The company has also deemed this security division non-core, and is looking to sell it.

KKCG said that the presence of this division brought Ferretti into the scope Italy's golden rule.

Sources said that officials from the ministry of industry were conducting initial hearings in this case with unspecified parties.

Italy often imposes restrictions on Chinese investment in its companies for security reasons.

Last month, the government cut the number board members China's Sinochem could appoint at Pirelli in order to avoid U.S. business restrictions. (Reporting and editing by Gavin Jones, Giuseppe Fonte)

(source: Reuters)