Telecom Italia postponed the Thursday release of its 2009 results amid a probe into an alleged 2 billion euro ($2.7 billion) money-laundering operation involving its Sparkle unit and broadband group Fastweb .
Telecom Italia, Europe's No.5 telecoms operator, said its board would delay approval of the results to March 25 because Sparkle could not quickly approve its own books as it sifts a 1,600-page court order.
Authorities seized 300 million euros in Sparkle cash and borrowings on Wednesday as part of the money-laundering probe, one of the biggest of its kind in Italian history.
As part of the inquiry, prosecutors have issued 56 arrest orders, including one for Fastweb's billionaire founder Silvio Scaglia and another for a senator from Prime Minister Silvio Berlusconi's ruling center-right party.
Shares in Telecom Italia were down 2.57 percent at 1.063 euros by 0824 GMT as the DJ Stoxx telecoms index was 0.25 percent higher.
The Sparkle board has resolved not to proceed with the approval of its ... statements since it must examine in full the very large quantity of documentation received in order to arrive at an accurate picture and assessment of the situation, the phone company said in a statement released late on Wednesday.
The Telecom Italia board will be asked to postpone approval of the results at a Thursday meeting as well as an update of its three-year business plan. The board also will put off calling the shareholder assembly.
Telecom Italia, which in speculation last month was linked to a possible merger with Spain's Telefonica, will hold a conference call at 1630 GMT on Thursday.
Prosecutors allege the money was laundered via fictitious international phone service purchases and sales between 2003 and 2006, carried out with the knowledge of top executives at Fastweb and Sparkle.
Italian prosecutors are seeking court-appointed commissioners for Fastweb and Sparkle as part of the inquiry. A court hearing in the case is scheduled for March 2.
Telecom Italia had sought to sell Sparkle as part of plans to cut debt.