Investigation by the judiciary – Court of Milan (proceedings activated before the Court of Monza)
Following the proceedings initiated by the Public Prosecutor of the Court of Monza - in which the Chairman of the Board of Directors and the Chief Executive Officer of Impregilo in office at time of the events in question are being investigated for the crimes covered by Articles 81 and 110 of the Italian Criminal Code and Articles 2621 and 2637 of the Civil Code - Impregilo S.p.A. and Imprepar S.p.A. were the targets of a preliminary investigation in connection with an alleged administrative violation related to the crimes subject of Article 25-ter, Letters a) and r), and Articles 5 and 44 of Legislative Decree No. 231/2001.
The charges against the targets of the investigation were announced by the relevant Public Prosecutor with a notice dated October 13, 2005.
The alleged charge against Impregilo is to have "prepared and implemented an organizational model unsuitable to prevent the crimes" allegedly attributed to the officers target of the investigation, from which the Company is alleged to have benefited.
The proceedings progressed through a series of interconnected and complex procedural phases, at the end of which, at a hearing held on July 12, 2007, concurring with the objections that the counsel for the defendants and the companies involved in these proceedings had raised since the preliminary hearing, the Court of Milan, ruling on a preliminary basis, declared that "the indictment issued by the Preliminary Hearing Judge at the Court of Milan on February 21, 2007, in the proceedings pursuant to Article 416 of the Code of Criminal Procedure, was null and void" and, consequently, ordered that the record of the proceedings be sent back to the Public Prosecutor at the Court of Milan.
Consequently, the Milan Public Prosecutor reactivated the proceedings and, in November 2007, filed with the Judge for Preliminary Investigations in Milan a motion to end the proceedings. On February 13, 2009, the Judge for Preliminary Investigations granted the motion of the Public Prosecutor limited to a portion of the charges, which were dismissed. As a result of this decision, the proceedings targeting Imprepar S.p.A. ended. At the same time, the judge sent the record of the proceedings back to the Public Prosecutor for a filing of charges for the portion of the motion that had not been granted. Specifically with regard to the charges that were not dismissed by the Judge for Preliminary Investigations, the Company filed a motion for summary judgment and, at a hearing held on September 21, 2009, the Public Prosecutor requested a decision of dismissal of the remaining charges.
At the hearing of November 17, 2009, Impregilo was found not guilty both of the first charge, due to the lack of an element of the crime, and of the second charge, as it was not punishable pursuant to Article 6 of Legislative Decree No. 231/01, having adopted adequate organizational models.
On March 21, 2012, the Milan Court of Appeals denied the appeal motion filed by the Public Prosecutor against the lower court’s decision, which found Impregilo not guilty of the charge of violating Legislative Decree No. 231/01, and fully confirmed the above-mentioned decision by the lower court judge, who found, inter alia, that the organizational model adopted by the Company was adequate. The Public Prosecutor appealed this decision to the Court of Cassation, which on December 18, 2013 handed down Decision No. 4677/14 cancelling the decision of the Milan Court of Appeals, returning the proceedings to a different section of the same Court for a new merit review. The ruling was summarized before the Court of Appeal of Milan which, in the hearing of November 19, 2014, acquitted the company and confirmed the rest of the acquittal of the preliminary investigation judge of the Court of Milan of November 17, 2009.
Other proceedings – Court of Florence
With regard to the criminal proceedings activated against the C.A.V.E.T. Consortium and certain individuals, including some former managers of the Consortium, it is worth mentioning that the appellate proceedings ended in June 2011 with a decision handed down in June 2011, which reversed in full the lower court’s decision, thus reversing the convictions handed down by the lower court and finding both the Consortium and the indicted individuals not guilty of any of the charges. The Public Prosecutor of the Court of Florence appealed this decision to the Court of Cassation, which, on March 18, 2013, set aside in part the decision of the Florence Court of Appeals ordering that the case be returned to the Court of Appeals. The reinstated proceedings before the Florence Court of Appeals got under way on January 30, 2014 and, on March 21, 2014, the Court of Appeals handed down a decision by which it rejected most of the charges levied by the Public Prosecutor, but upheld them in some important cases. The ruling of the Courts of Appeal of Florence, whose grounds were filed on May 29, 2014, was challenged by all the defendants and by C.A.V.E.T, as a party liable under civil law, and the related appeals were filed for Cassation in September this year. The Consortium, in protecting its interests, is confident that it will be able to demonstrate, again, in the subsequent courts of instance, the correctness of its actions.
A1 Milan-Naples Highway, work to upgrade the Apennine Mountains section between Sasso Marconi and Barberino di Mugello, La Quercia-Aglio segment
This project refers to the work to enlarge and modernize the A1 Highway, Base tunnel – Lot 9-11 – Valico Bypass. This order is part of a larger project being implemented by Autostrade per l’Italia S.p.A. to upgrade the A1 Highway with the construction of the Valico Bypass to improve traffic conditions and reduce travel time between Bologna and Florence. The iconic work of the Valico Bypass is the Base Tunnel: a tunnel with separate lanes (cross-section of 160 m2 and length of about 8.6 km) that will link the Emilia Romagna and Tuscany regions, connecting the future Badia Nuova rest area in the north with the new Poggiolino interchange in the south.
The works have been substantially completed with the exception of finishing work and some minor works to be carried out in the Tuscany Region.
Starting in June 2011, the Florence Public Prosecutor, at the end of an investigation launched in 2005, charged some employees/senior managers of Todini Costruzioni Generali S.p.A. with environmental crimes allegedly related to the construction of the Valico Bypass.
By a decision dated November 5, 2012, the Preliminary Hearing Judge ruled for all the accused that the statute of limitations had run out on the alleged crimes regarding water control and effluent management and indicted the above-mentioned defendants for the alleged crimes concerning the management of excavated soil and rocks and environmental damage.
In the hearing of March 26, 2013, before the Court of Florence, the Italian Ministry of Environment joined the proceeding as plaintiff seeking damages from the parties liable under civil law, that is Todini Costruzioni Generali, Autostrade per l’Italia S.p.A., and the other contractors involved (in addition to the said defendants) by claiming damages "for equivalent assets" of no less than €810 million or such amount as the Court considers just and appropriate.
In support of its claim, the Ministry of the Environment filed a report by the I.S.P.R.A. (an institute established within the Ministry), which was deleted from the record of the proceedings at a hearing on December 9, 2013, as the Judge ruled that the introduction of this document could not be allowed because it had not been developed through an adversary process and lacked the name of the party who wrote it.
Since the civil plaintiff failed to produce documents or consultants, at this point, the damage claim is not supported by any evidence as to its amount.
The investigation phase began in January 2014 and is still ongoing.
The Group denies having any responsibility for the disputed issues, emphasizing that its conduct was completely lawful and that the charges levied against it are groundless. It also objects to the outrageous amount of the damage claim filed by the Ministry of the Environment, which, in addition to being put forth without first requesting the adoption of any environmental remediation measures that might have been necessary, does not appear to be compliant with Italian law and European Directive No. 2004/35/EC. In that regard, the European Commission activated infraction proceedings against Italy in 2007 (No. 2007/4679), confirmed on January 27, 2012 with a complementary reasoned opinion, which recently resulted in the adoption, with Law No. 97 of August 6, 2013, of amendments to the Uniform Environmental Code enacted with Legislative Decree No. 152 of April 3, 2006, which include the elimination from the text of Article 311 of the above-mentioned Legislative Decree No. 152/2006 of the reference to the damage claim "for equivalent asset value," due to the fact that compensation for environmental damages can first of all be achieved with specific remediation measures.
In view of the foregoing considerations and comforted by the opinion of counsel, the Group believes that the above-mentioned damage claim is devoid of merit and, consequently, that the risk of the claim being granted is remote. Consequently, management did not find it necessary to recognize a provision in its financial statements.
Compliance with the requirements of Article 36 of the Market Regulations
Salini Impregilo confirms that it is in compliance with the requirements of Article 36 of Consob Regulation No. 16191 (the "Market Regulations"), based on the procedures adopted before the above-mentioned regulations went into effect and the availability of the related information.
Research and development activities
In accordance with the requirements of Article 2428 of the Italian Civil Code, the Company discloses that it did not carry out any research and development activities in 2014.