By Nathan Vifflin and Giuseppe Fonte
(Reuters) -Chipmaker STMicroelectronics’ supervisory board on Thursday denied allegations of insider trading concerning two members of its managing board and sought to reassure the Italian government the company was committed to its investments there.
Italy’s Economy Minister Giancarlo Giorgetti in a news conference late on Wednesday accused STMicro’s management of having sold shares it held a day before reporting negative results.
Giorgetti also said the Italian government did not support STMicro’s CEO Jean-Marc Chery, a Frenchman who has been in the role for seven years.
Meanwhile, French industry minister Marc Ferracci offered his “full support” to Chery in a post on social media platform X late on Thursday.
In its statement on Thursday, STMicro said the stock sales done during the company’s blackout period prior to results were made by its stock plan administrator “through an automatic procedure.”
STMicro also expressed support for Chery in its statement.
However, at a meeting of the supervisory board called on Thursday that renewed confidence in Chery, the only Italian representative, Paolo Visca, did not attend.
Italian Industry Minister Adolfo Urso and trade union officials were present as the company confirmed its planned investments at new facilities in Agrate in northern Italy and Catania in Sicily were on track.
It also said it would double production capacity at the Agrate site by 2027.
The group is ready to engage in “constructive talks” with Italian trade unions to avoid unilateral action on job levels in the country, slides from the meeting showed.
The Italian and French governments own a combined 27.5% share in the chipmaker through a holding company, but Rome has indicated it believes the company’s governance is imbalanced in favour of Paris.
European chipmakers, including STMicro, are grappling with a downturn in the automotive and industrial markets, which account for the bulk of demand. The company postponed the publication of its 2025 targets in January.
Also on Thursday, the chipmaker published details of a cost-cutting plan it announced in October, confirming it expected its workforce to be cut by 2,800 people globally, on top of normal attrition.
Beyond Italy, STMicro faces a class action lawsuit in the United States that alleged the company deceived investors by withholding information on the health of the business.
In Thursday’s statement from the supervisory board, STMicro said it had a “good defence” against that lawsuit.
(Reporting by Nathan Vifflin in Gdansk and Giuseppe Fonte in Rome; additional reporting by Makini Brice in Paris; Writing by Keith Weir; Editing by Milla Nissi, Barbara Lewis, Rachna Uppal and Nick Zieminski)
