Shares in the Web TV company Freedomland SpA were suspended on Milan's New Market Thursday after magistrates opened an investigation into suspected false accounting and share price rigging, Italian media reported.
The company, which enables customers to navigate the Internet using a television and set-top box, is suspected of having artificially inflated the number of its clients at the time it was seeking a stock market listing, the reports said. Some 20 percent of its 60,000 Italian clients were not genuine paying customers, investigators suspect.
Finance police, acting on the orders of Milan prosecutor Luigi Orsi, seized documents from banks, offices and the Milan Stock Exchange, Italian news agencies reported. Police appealed to members of the public who believe they may have been fraudulently listed as clients of the company to contact the Milan finance police.
Virgilio De Giovanni, the chairman and founder of the company, said he was shocked and worried by the reports. A normal tax inspection has been under way at Freedomland since March, De Giovanni said in a prepared statement. The company has demonstrated the absolute correctness of its behavior, he said. Freedomland has a leadership position in its market and significant reserves of cash, the statement said.
Aside from its activities in Italy, the company has also opened operations in Britain, Germany and Spain, a Freedomland spokeswoman said. "De Giovanni was due to hold a major presentation of his expansion plans for Spain in Barcelona today," said Genis Sinca, a Spanish journalist who has followed the development of the company.
De Giovanni is one of Italy's more colorful entrepreneurs and the founder of a magazine on how to become a millionaire.
Freedomland can be contacted in Milan at +3902-8187-0231 or http://www.freedomland.net/.