The lawyers: “It was a malicious strategy to make millions, to the detriment of savers.”
A twist occurred at the Collegiate Court of Bologna during the new trial hearing of the Bio-On case, the pioneering company in the production of 100% biodegradable bioplastics, which collapsed after a malicious speculative attack, causing serious harm to savers and investors. Testimonies highlight the existence of a strategy aimed at the destruction of Bio-On, resulting in the collapse of its stock. Among the possible motivations are speculative investments to drive down the stock and significant economic benefits for those who attacked the company. Also notable is the absence of oversight and protection of savers by Consob.
Bologna, 14/05/24 — During the crucial hearing on May 14, two key testimonies were heard: Dr. Maurizio Salom, an accountant who supported the accusations made in the video by Gabriel Grego that triggered panic in the stock market, causing the Bio-On stock to plummet, and Gabriel Grego himself, the author of the alleged “investigation” into Bio-On narrated in the video.
Salom, called to the witness stand, showed clear signs of discomfort, providing evasive and contradictory answers, accentuating the tensions and expectations surrounding this complex legal process. On several occasions, Salom evaded probing questions from the lawyers, merely responding with a reluctant “I don’t know,” indicating a clear difficulty in managing the interrogation. At a key moment in the hearing, when questioned about the compensation received for an expertise supporting Grego’s accusations, Salom admitted to receiving between €20,000 and €30,000 for work he claimed to have completed in about a month; however, wiretaps by the Financial Police revealed that he had actually reviewed the relevant documents in just three days, raising questions about the truthfulness of his statements and the accuracy of the work performed. Further questions were raised when Salom, pressed by the lawyers about who informed him about the existence of funds that would speculate on the collapse of the Bio-On stock, replied, “Most likely Grego told me,” an admission suggesting close collaboration with Gabriele Grego, another key figure in this process, outlining a picture of collaboration in the construction of speculative operations on Bio-On’s stock. The wiretaps also showed that Salom was aware of imminent legal actions against the administrators of Bio-On, suggesting that he had received privileged information anticipating and perhaps influencing the events that led to the dramatic downfall of Bio-On, even communicating to third parties that “Bio-On is finished” hours before the news became public. Furthermore, in his video report, Grego describes Salom as an impartial expert third party; however, the emerging evidence demonstrates the opposite, and, despite this, no steps have been taken to clarify his position regarding potential conflicts of interest.
Even more disruptive was Gabriel Grego’s testimony, who admitted to having a direct economic interest in the fall of the Bio-On stock, actively engaging with short-term speculative investment funds, which would have purchased between 2% and 3% of Bio-On shares, and who would have commissioned through a specific contract a report on the company from Grego with a negative slant, which then caused the stock crash. Grego also confirmed having earned several million euros in fees from the operation (the extent of the financial return for the investment funds that speculated downward on the stock is not known), and he admitted to having, according to him, notified Consob in advance of the intention to carry out short investments related to the dissemination of a negative report on Bio-On, Consob which does not appear, from the records, to have initiated actions of investigation, surveillance, and protection of savers, neither in those hectic moments nor subsequently. The hearing shed an unsettling light on the internal dynamics and relationships between the main players in this intricate legal case, with ramifications that extend well beyond the courtroom, given the enormous damage caused to savers and investors by the collapse of Bio-On’s stock and the failure to exercise oversight and protection action on their behalf by Consob. Finally, on the occasion of Gabriel Grego’s appearance, previously untraceable for months, he was physically served with a Summons for liability action related to the facts subject to the trial.
Bio-On’s rise: the emergence of a green & made in Italy technological powerhouse.
Bio-On S.p.A. was a fully Italian capital company that pioneered the production of 100% biodegradable biopolymers with no environmental impact. The company’s strategy, focused on intelligent management of intellectual property (through licensing to third parties of its patents) and intensive research and development activities (with collaborations with dozens of universities), led the start-up to achieve a market capitalization exceeding one billion euros, making it part of the exclusive club of the Italian Stock Exchange “unicorns.”
Bio-On boasted a vast network of collaborations with prestigious academic institutions and national and international research centers, with 69 active research projects. Among the partners were centers of excellence such as the Universities of Milan, Bologna, Naples, the “Futuro e Ricerca Consortium” of Ferrara, the University of Hawaii, and Clarkson University in the USA, and Tampere University in Finland. These multidisciplinary collaborations not only strengthened its impact on the Italian market but also expanded its influence in the global bioplastics sector; it was also the holder or exclusive licensee of 27 patent families, which included over 190 titles of proprietary rights, as recognized by the Bologna Court at the time of default. These patents, covering both production processes and products and applications, constituted a strategic asset of immense value, attesting to the innovative capacity and market potential of Bio-On.
The financial soundness of the company was guaranteed by the certification of accounts carried out by consulting giants such as PriceWaterHouseCooper (PwC) and later Ernst & Young (EY).
With such a pedigree, Bio-On consolidated its position as a rising star in the biopolymers sector, significantly influencing environmental policies and market practices internationally.
The pinnacle of success was reached at the end of 2018 when the company was classified as a “Golden Power Company”: this particular classification (regulated by Decree-Law no. 34 of 2011 and subsequently strengthened by Decree-Laws no. 21 of 2012 and no. 148 of 2017) required any attempted acquisition of companies considered of strategic national interest to be previously approved by the Italian Prime Minister.
The special status emphasized the importance of Bio-On not only as a technological pioneer but also as a significant asset for national industrial policy, reaffirming its key role in the country’s sustainable development and innovation strategies.
Crisis Onset: Speculative Attack and Legal Crisis
In July 2019, Bio-On’s success story took a dramatic turn due to an orchestrated attack by investment funds. These funds, with confirmed speculative “short-term” interests in its shares, triggered panic among investors by disseminating a video full of fake news. This was part of a smear campaign of “black PR” against Bio-On, resulting in a rapid collapse of its stock value, despite the founders Astorri & Cicognani depositing over 9 million euros into the startup’s coffers to support it and continue paying salaries and fixed costs.
A few months later, the Public Prosecutor’s Office of Bologna initiated an investigation based on accusations from the US speculative fund Quintessencial. This fund’s operational headquarters address corresponds to that of a well-known American art museum. The investigation led to the temporary arrest of Bio-On CEO Marco Astorri and the seizure of assets of other management members, totaling tens of millions of euros. These developments led to the suspension of operations and the subsequent bankruptcy declaration of Bio-On. The actions of the Prosecutor’s Office – described by many observers as hasty and unjustified – effectively sank a company already under media attack.
Thousands of Italian savers and numerous partner companies suffered significant financial losses, and several Italian Asset Management Companies (SGR) recorded considerable losses in their portfolios. But the entire “national system” took a hard hit, losing in a few months a potential national champion in a crucial sector for the “green” industrial development of the coming decades.
After the bankruptcy, an independent assessment revealed that, despite the reports from short-term funds defaming it as “an empty box indebted for tens of millions of euros”, the true value of Bio-On’s remaining assets was at least 95 million euros. This discovery raised further doubts about the adequacy of the legal and financial decisions that led to the too hasty “liquidation” of Bio-On. The company’s sale process, conducted through downward auctions, led to its total dissolution.
The Bio-On case reflects the vulnerabilities of innovative startups in navigating complex and often unpredictable financial markets. The case also highlights deficiencies in supervision by financial authorities, with Consob at the forefront, whose role should be to monitor market fluctuations and intervene in defense of the market itself; instead, despite signs of irregular trading and the stock collapse, Consob’s initiatives were absent or entirely insufficient and untimely, if not counterproductive, raising questions about their effectiveness and the need to initiate concrete reforms to protect the interests of investors and savers.
Some of the Key Figures in the Speculative Attack on Bio-on
MAURIZIO SALOM
- He is cited by Quintessential as a “reliable source” supporting the criticisms against Bio-on. Official documents reveal that Dr. Maurizio Salom has a company share in Materi-Bi, which controls Novamont and also through IMT SRL (a partner of MELVILLE SRL which fully controls NOVAMONT and MATER-Bi, whose sole administrator is Maurizio Salom). These roles in Novamont and related companies, contrary to Quintessential’s claims, put him in a clear conflict of interest.
- Interceptions reveal Salom’s position contradicting his portrayal as an independent consultant. In one of the numerous interceptions, Salom states: “Either they arrest them, or they arrest me; it’s war,” revealing a personal and direct involvement in the events related to Bio-on far beyond the role of a simple independent expert.
- Further interceptions show a deep and continuous interaction between Salom and some protagonists of the speculative attack, including Gabriel Grego. Salom’s repeated evasive answers to lawyers’ questions during the trial and the contradictions in his statements raise significant doubts about the reliability of his assessments.
- Regarding his financial compensation, Salom declared receiving “between 20,000 and 30,000 euros for an evaluation done in about a month,” while interceptions reveal he reviewed the documents in just three days, casting shadows on the completeness and accuracy of his evaluations. His connections to other companies in the biopolymer sector and the intercepted conversations underscore a scenario of hidden interests and possible manipulations.
GABRIELE GREGO
- Gabriele Grego emerges as a controversial figure in the context of Bio-on’s collapse. Grego has openly admitted to having a personal interest in the decline of Bio-on’s value, an admission that raises serious questions about his integrity and the objectivity of his denunciation and attack on Bio-on.
- The client, the self-proclaimed QCM fund, is not based in New York but in the Cayman Islands and cannot be reached by any provision of the GDF or the Bologna Prosecutor’s Office. Quintessential Capital Management (QCM) of Gabriele Grego, Managing Partner and Chief Investment Officer, had three employees: Zachary Karp, Head of Business Development; Michela Raumer, Executive Assistant; and Giordana Grego Levy, Director of Investor Relations. In an article by Emerick De Narda in Milano Finanza on July 30, 2019, it is written: “unlike what he claims, he is not American but is registered in the Cayman Islands (with a domicile at 330 Madison Avenue, 6th floor, New York). To confirm the limitations of the Quintessential fund is also the fact that accountant Maurizio Salom was contacted in June to draft an opinion on Bio-on’s balance sheet by the sister of Gabriel Grego (frontman of Quintessential), who, 20 years earlier, when living in Italy, was a classmate of one of Salom’s daughters. Personal acquaintances aside, a lightweight in the New York context, where his notoriety is rather limited.”
- Despite the evidence, it is shocking to note that the Bologna Prosecutor’s Office did not consider the possibility that the document published on July 24, 2019, by QCM contained falsified or otherwise non-genuine and decontextualized information. This omission may have had a significant impact on the course of events and public perception of the Bio-on crisis, confirming Grego’s position as an executor of the interests of other hidden actors in the backdrop of this financial affair.
- The Origoni law firm actively coordinated communications with CONSOB on behalf of Gabriele Grego and Maurizio Salom through the sending of official communications (PEC) that contained false information regarding the publication date of a report and a video critical of Bio-On. There is a significant connection between the Origoni law firm and the Grego family, specifically through Claudio Grego, the father of Gabriele Grego. Claudio Grego is mentioned as a collaborator of the Origoni firm, establishing a direct link between the firm’s legal activities and the Grego family.
- The QCM accusations of false accounting and false market communications advanced by QCM against Bio-on are based on a report and a video released on July 24, 2019, containing impactful phrases, completely decontextualized statements, and blatant falsehoods refuted by certified documents.
Summary of the Hypotheses of Accusation
The accusations made by Bio-on’s top executives against Maurizio Salom, Gabriele Grego, Paolo Visioni, Giuliana Paoletti, and lawyer Biancolella involve the alleged participation of some of these individuals in a strategy aimed at speculating on BioOn’s stock through the dissemination of what BioOn’s founders claim to be false information about the company. According to Bio-on’s founder, Marco Astorri, the motivations behind these actions are multiple and include significant undeclared economic interests:
- Removal of a competitor: Bio-on is considered a direct threat to Novamont, being ahead in terms of technology and production capacity.
- Significant economic benefits: The group sought to take advantage of the financial situation through short selling operations, with the participation of four short funds and key figures on Novamont’s board, including Dr. Tazartes, described as the “long hand” of the operation and linked to Engadine LLC, one of the main entities shorting Bio-on’s stock.
- Profit for Grego and the QCM fund: These were used as the main executors of the plan, aiming for direct gains from the decline in Bio-on’s stock.
- Protection of speculative investments: It is suggested that the action was intended to safeguard the interests of the funds and private investors involved in the speculative operations, as highlighted by a CONSOB communication cited in the judicial documents.
- Increase in the value of companies linked to Novamont: The group aimed to enhance its economic valuation by eliminating a competitor, thereby improving Novamont’s market position.
- Postponement of the need for recapitalization of Novamont: With significant debts, the strategy included attempting to delay the need for new investments in Novamont by eliminating Bio-on, the only serious competitor in the fully biodegradable biopolymer market.
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