Police Seize $54M in Bank Monte dei Paschi di Siena Investigation

Italian police is reported to have seized $54M (40M Euro) in a probe into embattled bank Monte dei Paschi di Siena.

Italian news agencies say Siena prosecutors ordered the seizures Wednesday.

Prosecutors in Siena have been questioning former managers in recent days over allegations that the bank overpaid for the Italian bank Antonveneta, which it purchased for euro9.3 billion from Spanish bank Santander in 2007. The bank, informally known as Montepaschi, also is being investigated for three trades that are expected to cost it hundreds of millions of euros.

Prosecutors alleged in a document reviewed by Reuters on Wednesday that Monte dei Paschi misled the Bank of Italy over a 1-billion euro hybrid instrument it used to partly fund its acquisition of rival bank Antonveneta.

Monte dei Paschi is being investigated for alleged wrongdoing relating to its 2008 acquisition of Antonveneta, a smaller rival. If proved correct, the allegations by prosecutors that Monte dei Paschi misled the Bank of Italy over the true nature of part of the financing it raised would undermine the basis on which the deal was approved.

The Siena-based bank declined to comment on the allegations.