Yacht Builder To The World’s Super-Rich Caught Up In Spy Claims

By Daniele Lepido

Jun 6, 2025 (Bloomberg) –In early April 2024, Xu Xinyu, an executive director at Ferretti SpA, noticed an SUV and two strange men lingering outside the elegant 18th century palace that houses the Italian luxury yacht maker’s Milan offices. On other days, during visits to the Palazzo Parigi Hotel and the Mandarin Oriental, Xu noticed the same individuals again. Soon, he had become convinced he was being followed, according to people familiar with the situation, who requested anonymity in order to discuss confidential matters. 

Xu, who also sat on the board of Ferretti’s majority owners, the Chinese industrial conglomerate Weichai Group, engaged a counter-surveillance firm. During its first sweep on the night of April 3, the security company found a listening device and signal amplifier hidden on Xu’s desk. In the offices of the board secretary and the company’s Chinese-Italian translator, they uncovered other devices concealed in power outlets. Ferretti confirmed in a statement in response to Bloomberg News inquiries that surveillance devices had been found on its premises.

In the months before the bugs were discovered, the relationship between senior managers at Ferretti — one of the world’s leading designers of yachts for the super-rich — and its biggest shareholder, had soured over a share buyback program, the people said. The plan, which was withdrawn, briefly triggered the scrutiny of the Italian government under a special “golden” veto power over deals involving strategic companies. 

When the surveillance was uncovered, the people said, some of Ferretti’s management feared that someone inside the company may have been behind it.

The spying incident has resulted in two separate criminal cases currently with prosecutors in Milan. One filed in May 2024 by Xu and the company secretary and translator against “persons unknown,” alleging unauthorized access to a computer system and unlawful interference in private life, according to people with knowledge of the filings. Those crimes, if proven, can carry both civil and criminal penalties, including jail time in the most serious cases. In January 2025, Ferretti filed its own case with the prosecutor, according to the company’s statement.

The investigations are still in preliminary stages, and there is no certainty that charges will be brought, if the public prosecutor determines that no criminal offence has been committed. 

Neither case has yet been disclosed to investors. In Italy, publicly traded companies are typically required to notify the market of security breaches and criminal investigations, legal experts said.

In its statement, Ferretti confirmed that the complaints had been lodged with the prosecutors. “Ferretti SpA considers itself an aggrieved party, having been wronged by the unlawful and improper installation of surveillance devices within its offices,” the statement said. The company denied that there was tension between management and its Chinese shareholder. “The shareholder and the company has enjoyed a relationship of mutual esteem and full, constructive collaboration for over 10 years,” it said.

A media representative at Weichai Group didn’t respond to multiple calls from Bloomberg News. Xu did not respond to requests for comment sent via email. A representative for Milan’s prosecutor’s office did not respond to a request for comment.

Golden Power

Weichai currently owns a 37.5% stake in Ferretti. An alleged rift between Ferretti’s Chief Executive Officer Alberto Galassi and some of the board opened in February 2024, when they voted on a share buyback plan, which would have seen the company repurchasing as much as 10% of its own shares, according to people with knowledge of management discussions, who did not want to be identified because they were discussing confidential matters.

Galassi declined to comment.

The board, made up of nine directors, six of them Chinese and three Italian, approved the plan, which the Chinese board directors had originally opposed, because they worried it would trigger scrutiny from the Italian government, the people said.

A 2012 piece of legislation gives the Italian government a so-called “golden power” over companies of strategic importance, which means the authorities have broad powers to intervene in mergers and acquisitions, share buybacks and other transactions. Although the golden power law was initially limited to screening foreign investments in a handful of obviously strategic sectors, such as defense, energy and telecoms, it has since been expanded to include a wider swathe of the economy, from agriculture to media.

A deteriorating relationship with China since 2019 has meant that the Italian government has been putting Chinese investments under greater scrutiny, using the golden power rule to intervene in several deals.

The tiremaker Pirelli SpA, whose largest shareholder is the Chinese industrial group Sinochem, has been at the center of a dispute over the transfer of technology. In April, Pirelli formally changed its governance status to limit Sinochem’s control over the company, sparking a clash between management and the board of directors.

“The current, wide application of the golden power law effectively could sometimes serve as a tool for economic protectionism under Italy’s right-wing government,” said Luca Picotti, a lawyer specializing in foreign investment rules. The rule has led to friction at Italian companies with non-European boards, Picotti added.

Alongside its luxury yachts, Ferretti also makes boats for police forces and coast guards. Although that division is tiny — making up less than half a percent of its total sales — it’s enough to put it on a list of enterprises that the Italian government considers of strategic significance, alongside defense contractors and giant multinational companies. The company has previously made formal submissions to the government under the golden power law: ahead of a canceled initial public offering in 2019, and subsequently when it listed in Hong Kong in 2022 and Milan in 2023.

Galassi formally notified the Italian authorities of the buyback plan at the beginning of March, the people with knowledge of the situation said. That was, the people said, sooner than the Chinese directors of the company had expected, and they felt that the CEO might be using the golden share rule as a way to sideline them by seeking allies in the Italian government.

Ferretti denied that Galassi had gone against the board’s wishes, and said that the golden power notification “was carried out with the formal and definitive approval of the Board of Directors.”

“The relationship between the shareholders and the company is excellent, marked by ongoing collaboration and mutual respect,” the Ferretti statement said.

On Easter Sunday, March 31, 2024, the board canceled the proposed buyback and withdrew the golden power filing, saying that they needed more time for legal and regulatory assessments in Italy and Hong Kong.

In mid-April, the private security contractor hired to investigate the alleged surveillance submitted its full report on the incident, the people said. On May 13, Xu and his two colleagues filed a formal complaint with prosecutors.

On May 31, according to people familiar with the matter, who did not want to be identified because they were discussing confidential matters, Xu informed Galassi about the espionage in a conversation. A month later, Xu reiterated his concerns in an email, the people said, suggesting that the investigation implied the breach may have come from within the company. On both occasions, Galassi asked for a copy of the security firm’s report so that he could open an internal investigation. At that stage, Xu declined, the people said.

Over the next few months, the people said, some of Ferretti’s directors discussed the possibility of replacing Galassi. Galassi declined to comment on speculation over his job.

In August, the board was reshuffled, with Weichai’s Jiang Kui becoming Ferretti’s new chairman.

In a statement to Bloomberg News, Jiang said: “The relationship between the Ferretti Group, its management, and Weichai has always been and remains very strong.”

Ferretti’s statement said that after a board meeting on Oct. 23 the company ordered an internal investigation, and then, on Jan. 20, filed its own complaint with the Milan Prosecutor’s office.

Experts contacted by Bloomberg were split on whether a company dealing with board-level surveillance should have disclosed the criminal complaints to the market.

“Although the company has confirmed that corporate spying took place, the contours of the affair are still murky: there are no named suspects yet, and the Milan prosecutor’s investigation — shielded by statutory secrecy — is still under way,” Domenico Colella, a senior lawyer at Milan-based Orsingher Ortu law firm, specializing in cybersecurity and data breaches, said. “I therefore believe the company was right to keep a low profile and take a cautious stance by withholding the information from the market, at least for now.”

Other legal experts told Bloomberg that listed companies could be expected to notify the market of any kind of serious data breach or criminal complaint.

“When inside information such as a criminal investigation linked to an allegedly severe privacy breach becomes known internally, companies must quickly disclose it as soon as possible,” Claudia Imperatore, a Milan-based assistant professor at Bocconi University’s accounting department said, not referring to Ferretti specifically. Such rules apply to any information with market-moving potential, and allegations of board-level espionage could indeed meet that test, she added.

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