Italian police arrest tycoon's family over false accounting, market manipulation

ROME (AFP) - A prominent Italian businessman and his two daughters were arrested on Wednesday and the police are searching for his son in an investigation into insurance company Fondiaria-SAI, prosecutors said.

Mr Salvatore Ligresti, the former chairman of Fondiaria-SAI, was placed under house arrest, and Jonella and Giulia Maria Ligresti have been jailed.

They are suspected of false accounting and market manipulation and prosecutors said they may have been preparing to flee and hide evidence in the inquiry.

Mr Ligresti's son Paolo is believed to be in Switzerland and is officially considered on the run.

"He does not want to come," said Mr Vittorio Nessi, deputy chief prosecutor in Turin, which is leading the investigation.

Mr Nessi hinted at a possible extradition request, saying there were "international conventions and possible solutions".

The police also arrested three former managers at the company.

The business daily Il Sole 24 Ore said the Turin prosecutor's office, which is leading the investigation, suspects the people arrested hid important information from investors in the company.

Investigating judge Silvia Salvadori said in a request for indictment that Paolo Ligresti was overheard talking about a recent trip to the Cayman Islands saying he "had no great wish to come back" and saying that "others would follow him".

The company Fondiaria-SAI (FonSai) is accused of hiding losses and causing damage of some 300 million euros (S$494 million) to shareholders.

FonSai "served the interests of the Ligresti family," the prosecutor's office said, adding that it was considering seizing assets from the family.

Fondiaria-SAI is also being targeted by a second investigation by the Milan prosecutor's office.

Mr Ligresti had previously been convicted of corruption after a wave of investigations in the early 1990s.

The Ligrestis were long considered one of Italy's most powerful families, with major interests in the construction industry and the financial sector.

But FonSai has been in serious financial difficulty in recent years and last year merged with its rival Unipol, leaving the Ligrestis with a minority stake.