A Brand with a 154-Year History Saw Its Shares Drop Due to Assistance to Russia 0 12

Activist investors Grizzly Research accused Pirelli of having close ties with Russia. They claim that the Italian tire manufacturer, among other things, supplies its products to the Russian military. Pirelli denies the allegations, and the company has instructed its lawyers to protect its business reputation. Pirelli's shares in Milan fell by 13%.

The activists assert that they found discrepancies between Pirelli's publicly disclosed revenues and data from Russian reports. According to them, 10% of the tire manufacturer's net profit comes from operations in Russia, while Pirelli reports that Russia, the Middle East, Africa, and India combined account for 6% of revenues.

Grizzly Research also claims that Pirelli's tire center in Donetsk services the Russian military. The activists stated that they called the center and the Russian Pirelli hotline and were able to place an order.

Pirelli's factory in Kirov is located on the same territory as the factory of the NIIR "Rostec" institute. Grizzly Research claims that this institute owns a 25% stake in several Russian assets of Pirelli, and there is another minority shareholder with a 9.99% stake that appears to be closely linked to it.

Pirelli stated that the claims made by Grizzly Research "are not true." The company has instructed its lawyers to "take action in all jurisdictions" to protect its business reputation and shareholders.

Pirelli & C is an Italian company controlled by the Chinese chemical giant Sinochem Holdings. It is one of the largest manufacturers of automotive tires in the world (fifth by revenue in 2007). Its headquarters is located in Milan, Italy. The company was founded on January 28, 1872, by Giovanni Battista Pirelli under the name G.B. Pirelli & C. It originally engaged in the production and sale of rubber products.