Strategy & Operations » Governance » Telecom Italia and the strange tale of the Emperor’s tomb

Telecom Italia and the strange tale of the Emperor’s tomb

How and when a digital contract for the Augustus Mausoleum was awarded to ad giant Havas is central to a probe ordered by the board of the telecoms giant.

The mausoleum of Augustus was constructed in 28BC as a tomb for the first Roman Emperor. Unlike many of the eternal city’s great sites, it’s a dilapidated ruin, that has up till now disappointed tourists prepared to pay a visit.

The building has had a troubled history after its symbolism was appropriated by Fascist dictator Benito Mussolini, and efforts to restore the massive tomb have foundered over the years on bureaucracy, inter-departmental squabbling and lack of funding. But the city of Rome decided to renovate it in 2015 and allocated €4.3m to the project.

In May 2017 Fondazione TIM, the Foundation of Telecom Italia, announced it would donate €6m to complete the restoration of the mausoleum.

“We’re going to bring back to life one of the great masterpieces of ancient Rome, which has lain abandoned in the middle of the city for years,” declared Rome’s mayor Virginia Raggi on the announcement.

Fondazione TIM also confirmed it would spend an additional €2m on a digital multimedia experience for the mausoleum, involving a dedicated website, a documentary on the history of the site and a show on the site “that tells the history of our country from Etruscan origins to our days.”

From a shortlist of three, advertising and public relations group Havas won the bid to undertake the digital project- which raised concerns from some of  Telecom Italia’s minority shareholders.

They were irked because Havas was majority-owned by conglomerate Bolloré Group, controlled by French billionaire Vincent Bolloré, who held sway over media giant Vivendi that was on the cusp of controlling, or was already in full control of  Telecom Italia. Last year Bolloré Group sold its 60% stake in Havas to Vivendi.

Investor fears

Telecom Italia’s minority investors have been concerned that the payment might have been made from one Bolloré-owned entity to another. Telecom Italia also awarded a marketing budget with an undisclosed budget to Havas in 2017, the telecoms group confirmed. The deal is thought to be worth close to €100m.

Fondazione TIM’s art director for the project Luca Josi is also Telecom Italia’s brand strategy and media director, the company has confirmed, but insisted he did not directly award the digital contract to Havas.

“We have a very strict procedure ruling the choice of our providers: as per our purchasing procedure, TIM’s Purchasing department launched a call for tender based on the best offer. It is not Luca or any director at TIM [Telecom Italia] that chooses directly who their business partners are,” said a Telecom Italia spokeswoman.

She said the process to award the digital project “started in early 2016, before Vivendi gained “coordination and control” of TIM, i.e. none of its controlled companies was considered a ‘related party’.”

At the time of writing the Telecom Italia spokeswoman could not give a specific date for the award of the digital contract.  Nor do any of the of the telecom group’s recent reports and other available corporate documents offer an accurate timing of the award.

Vivendi took effective control of Telecom Italia on 11 March 2016 when the French group acquired 24.9% of the telecom group’s shares, it has been widely reported. It had also gained four seats on the group’s board by this stage.

But in April 2018 Vivendi lost control of the board of Telecom Italia after a majority of shareholders voted to back a plan for an alternative set of directors from US activist hedge fund Elliott Advisors.

Internal investigation

The board of Telecom Italia is understood to have recently ordered an internal audit of the process and timeframe of the award of the digital project.

The Telecom Italia spokeswoman said: “As per policy, TIM doesn’t comment on the existence or in-existence of any audit project within the company.” Elliot Advisers declined to comment on the issue.

On the award of Telecom Italia’s marketing brief to Havas, the Telecom Italia spokeswoman said: “the Purchasing Department launched a call for tender; many international agencies presented their best offer based on the brief and the contract is assigned following an evaluation by Purchasing that is the only function that has access to the economic offers and assigns the budget on the basis of the best offer,” she added.

Last April it was reported that Vincent Bolloré was placed under formal investigation by a French judge in a corruption probe. A Bolloré Group subsidiary allegedly undercharged for work helping two African presidents win power in return for lucrative contracts.

The BBC reported at the time: “Investigators are looking into allegations that his Havas advertising agency – a subsidiary of the group – provided discounted communications advice to Guinean President Alpha Condé and Togolese President Faure Gnassingbé during elections in 2009 and 2010.”


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