ITALY’S government has limited the influence of China’s Sinochem Group on tiremaker Pirelli, including Sinochem’s ability to nominate a new chief executive.

Italy’s decision comes after Sinochem, Pirelli’s largest shareholder with a 37% stake in the 151-year-old Milan-based firm, notified Italy’s government in March of plans to renew and update an existing shareholder pact with fellow investor Camfin, a company controlled by Pirelli’s boss Marco Tronchetti Provera.

Pirelli said yesterday in a statement to investors that Italy’s government had ruled that only Camfin could nominate candidates to be its chief executive.

Pirelli also said the government had decided that any changes to the company’s corporate governance should be subject to official scrutiny.

The Italian firm said China National Tire and Rubber Corp., a company of Sinochem, must give Pirelli full autonomy in regard to its strategic, industrial and financial plans.

The decision falls under Italy’s “golden power” rule that allows the government to intervene in matters deemed to be in the national public interest. Pirelli’s technology is also protected by the ruling, the company said.

Reuters reported Friday that Italy’s government was concerned about Sinochem’s growing influence on Pirelli, as the proposed agreement would have allowed it to appoint more board members and potentially choose Pirelli’s future CEOs. (SD-Agencies)