Page 259 - CRC_One Report 2021_EN

Business Overview and Performance Corporate Governance Financial Statements Enclosure

asked the court to annul the new construction permit or Palazzetto C to be off-limits or impose a fine for
and order the construction and modification work the construction and modification in case demolition is
to be dismantled. In case no demolition is carried unfeasible. Such a demolition order may result in reduced
out, the plaintiff requested that a minimum fine of net area of the shopping mall, which in turn could
40 million euros (about 1,490 million baht) be imposed force the Group to close the shopping mall temporarily
based on the plaintiff’s valuation. The plaintiff also and adversely affect the Group’s operations in Italy.
demanded about 5 million euros (about 186 million baht) In addition, such an order may have a negative impact on
in damages. In addition, the plaintiff petitioned to the relationship with different brands that are awarded
the President of Italy regarding the matter. This latter the right to use the affected area. Also, the Group could
complaint was combined with the case previously face demands resulting from contract infringement,
filed with the Administrative Court of Rome. Later, which may have a significant negative impact on
Italy’s Council of State issued Order No. 6580 on the Group’s business, cash flow, operating results,
2 October 2019 to declare the new construction financial status and business opportunities. Regarding
permit invalid (This order resulted in termination of the fine over construction and modification, REI as
the plaintiff’s petition regarding the previous construction the building’s owner will be held responsible directly
permit filed in February 2018). For this reason, for payment. However, in case REI fails to pay the fine,
the plaintiff petitioned Italy’s Council of State again La Rinascente S.p.A. (a subsidiary of the Group) may
for an order of dismantling the construction and have to shoulder the responsibility under the Italian law
modification work covering the building’s area of if La Rinascente S.p.A. is found to be directly involved
4,000 square metres. Also, the plaintiff asked for with the planning and modifying the building in question.
an order that the shopping mall is off-limits, for a ban on In that case, La Rinascente S.p.A. retains the right to
commercial use of the old building-which is part of petition the court in protesting such an order and may
the shopping mall (“Palazzetto C”) and for the appointment exercise the right to seek compensation for its paid fine
of a specific official to enforce the order in case from REI or any relevant administrative agency.
the Municipality of Rome refuses to implement it.
Thereafter, the Claimants raised an objection to
Under the Italian law, in case a construction permit is the Council of State, arguing that the Municipality of Rome
revoked, and no replacement is issued, the authorised had no authority to grant the Amnesty Building Permit,
authority (that is the Municipality of Rome) may invoke where proceedings and witness examination took place
its authority under Section 38 of the Presidential on 18 June 2020. On 9 September 2020, the Council of
Decree No. 380 dated 6 June 2001, for demolition of State ordered that we won the case since the Amnesty
any structure built unlawfully. In case demolition is Building Permit had been lawfully issued and had full
unfeasible (possibly due to safety or technical reasons), legal effect within the authority of the Municipality of Rome.
the authorised agency may impose a fine comparable Nevertheless, the Claimants also filed a petition with the
to the market value of the building constructed unlawfully. Regional Administrative Court to contest on the legitimacy
of the Amnesty Building Permit and claim for damages,
On 12 December 2019, the Municipality of Rome issued which would entail further proceedings in the future.
a revised permit (“revised permit”) to rectify errors in
the original construction permit and the new construction
permit. However, the plaintiff may protest the revised permit.
In case the plaintiff succeeds in protesting the revised
permit or the dispute under consideration, or if any flaw is
found in the legal proceeding to counter the protest
against the revised permit, the revised permit risks becoming
void or invalid. If that is the case, it is possible
that the Municipality of Rome or any specially authorised
official may: (a) order partial or entire demolition of
the construction and modification (no larger than about
4,000 square metres); or (b) order the shopping mall

Annual Report 2021 (Form 56-1 One-Report) 259