Milan court sentences ex-Valentino chairman for tax evasion

A Milan court on Wednesday handed suspended sentences to former Valentino chairman Matteo Marzotto and two other people for tax evasion as part of an investigation into the sale of the Italian fashion house to private equity group Permira.

Along with Marzotto, the court also sentenced his sister Diamante Marzotto and entrepreneur Massimo Caputi.

The three denied wrongdoing through their lawyers and will appeal the verdict. They were each sentenced to 10 months in prison but will not have to serve any time there as the term was less than two years and they had no previous conviction.

The Marzotto family, one of Italy's oldest fashion and textile clans, sold its 29.6 percent stake in the Valentino Fashion Group, which then included both the Valentino label and Hugo Boss, to Permira in 2007.

In 2012, police said an inquiry had shown that International Capital Growth, a Luxembourg-based holding company used by the Marzotto family in the sale, made a capital gain of nearly 200 million euros ($223 million) and should have paid 65 million euros in taxes to the Italian authorities.

Assets worth that amount were frozen by the authorities.

The Marzotto Group subsequently paid 57 million euros as part of a settlement with the authorities and the Milan court on Wednesday ordered the release of the assets previously frozen.

Ten other people were targeted by the investigation but negotiated a plea bargain and were removed from the trial.

$1 = 0.8986 euros