“Bio-on also confirmed that its headquarters and administrative, operational and secondary units of the company had been subjected to searches and probative seizure of documents.”
The Chief Executive of Italian bioplastic company Bio-on has been arrested and the firm’s headquarters in Bologna have been searched as part of a probe into false accounting and market manipulation.
In a press statement issued on 24 October, Bio-on confirmed that Marco Astorri had been placed under house arrest as part of the so-called “Plastic Bubbles” investigation carried out by the Public Prosecutor of Bologna against members of the Board of Directors and the Board of Statutory Auditors of the Company.
According to news channel Reuters, a Bologna prosecutor said that co-founder Guido Cicognani and chief auditor Gianfranco Capodaglio were also barred from exercising their profession. The prosecutor said that another six people were under investigation.
As part of the probe, Bio-on also confirmed that its headquarters and administrative, operational and secondary units of the company had been subjected to searches and probative seizure of documents.
The prosecutor, who said 60% of the company’s capital which was held by the founders had already been seized, asked the court to replace top management at the Bologna-based company.
Italian prosecutors opened a probe in July over alleged market manipulation after US fund Quintessential Capital Management accused the bioplastics company of accounting irregularities.
Bio-on, has repeatedly denied Quintessential’s accusations and has filed a legal complaint against the fund.
Quintessential has said it has an economic interest in the price movement of Bio-on shares, which typically means it has a short position on the company’s stock.
Elsewhere, as part of the Plastic Bubbles probe, Reuters reported that Italy’s tax police had searched Banca Finnat Euramerica’s headquarters in Rome.
The bank, which advised Bio-On with its initial public offering in 2014, did not confirm its offices had been searched, but said in an emailed statement on Friday it hoped authorities would clarify the situation as soon as possible.
“Banca Finnat confirms it will cooperate fully with prosecutors and market authorities and is evaluating the whole situation to assess whether conditions are in place to take action to preserve its interests,” it said.
Banca Finnat confirmed the latter statement to Bio Market Insights.
Banca Finnat has a €15 million credit exposure to Bio-on and a 10% stake in two of the company’s joint ventures.
In a press statement issued on 24 October, Bio-on said that it would “make every effort to identify the most appropriate solutions to overcome this difficult moment, ensuring a future for the PHA technology project for the production of non-polluting bioplastics”.
Nobody from Bio-on was available for comment this morning (28 October) when contacted by Bio Market Insights.
The investigation will come as a disappointment for Bio-on. This is because the firm has recently been ramping up its partnerships with well-known brands to develop its bioplastics. For example, in May, it worked with fast-moving consumer goods giant Unilever to unveil a new line of cosmetics for sun protection made from ingredients containing biodegradable bioplastics.
In January, Bio-on teamed up with design specialist Kartell to unveil a new company called Eloxel in order to develop the use of bio-plastics in the electronics sector.