Revolt of the Little Man

For the small investor in Europe, the rule has long been to put up and shut up. He could buy a company's stock, but for him to complain about the company's management was not done. No wonder, therefore, that last week Giorgio Valerio, chairman of Italy's Montecatini Edison, was in a state of shock. At the annual meeting of Italy's largest private company, the long-frustrated small stockholders angrily showered Valerio with a mixed barrage of small coins, epithets and crumpled copies of the company balance sheet. Their urgent message was that it was time to start listening to the little man.

The revolt was sparked by fear among investors that Montedison was on the verge of "hidden nationalization." The two biggest government industrial enterprises--ENI and I.R.I.--recently acquired a near-controlling interest in Montedison, a diversified manufacturer of chemicals and other basic products (TIME, Oct. 18). Now they were proposing a rule change that would give government forces virtual veto power in the Montedison board. Enraged, more than 2,000 small stockholders turned up at the meeting, the largest such group ever to so gather in Italy.

They were still heavily outgunned in shares and assigned proxies, 72 million to 308 million. But, as one insurgent shouted, "I have been in India and I know the meaning of passive resistance. We will stay here ten days if necessary." A filibuster was on. Every now and then, somebody would jump up and shout: "Shareholders of Montedison, resist!" The meeting went on for 17 hours until 2:30 a.m. Ultimately, Valerio and the government forces had to accept a stalemate. The proposed rule change was tabled, pending a future session.

It will probably be passed then, though insurgent leaders intend to mobilize all of the 380,000 shareholders. One of them, Giorgio Pisano, the manager of Candido magazine, vowed: "The battle has just begun." At the very least, Italian businessmen have seen an impressive sign of small-investor muscle. Other European industrialists cannot write off the incident as a show of Italian emotionalism. On the same day as the Montedison revolt, a determined band of West German shareholders did battle with the directors of the NSU auto manufacturing firm. As a result, they won the promise of a higher price per share for agreeing to merge their firm with a subsidiary of Volkswagen.

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