Mafia Ties Shake Italian Bank: Banca Progetto Placed Under Court Administration

Banca Progetto, an Italian bank, is under court administration for alleged mafia-linked lending. Prosecutors claim it provided state-guaranteed financing without thorough checks. The bank was recently set to be sold by Oaktree to Centerbridge. Similar actions have been taken against companies associated with Armani and LVMH for worker exploitation probes.

Banca Progetto, a modest Italian bank, has found itself entangled in a legal quagmire, as a recent court document reveals it has been placed under court administration. Accusations of lending money to an individual arrested on mafia charges have surfaced, casting a shadow over the institution. This action follows the bank's planned sale by investment firm Oaktree to Centerbridge.

In parallel developments, Milan prosecutors have similarly intervened with companies linked to luxury giants, Armani and LVMH, as they investigate allegations of worker exploitation among suppliers. Such movements highlight a broader judicial crackdown on unethical corporate practices within Italy.

The court's decision to appoint a temporary administrator aims to rectify Banca Progetto's operational missteps while maintaining business continuity. No formal charges have been placed against the bank. Allegations focus on the bank's failure to conduct due diligence when issuing state-guaranteed loans, a negligence detailed in documents acquired by Reuters.

(With inputs from agencies.)