Telecom Italia (TI) is facing a share holder revolt from investors who own stock that does not carry voting rights.

The company wants to convert its non-voting shares to become voting shares as part of a planned restructuring of Telecom Italia's parent company Olivetti.

But a rebel group of non-voting shareholders protest both at the pricing of the shares in the conversion and about the way Olivetti allegedly is ignoring their preferential rights.

Olivetti wants the shareholders to pay about six euros per share to convert them into voting shares, that is a premium of 48%.

Court case looming

One non-voting shareholders is threatening to sue because he feels this is too expensive.

The US hedge fund Liverpool's Gordon Singer told the news agency Reuters that one option could be to take out an injunction to halt the buyback.

He argues that due to their preferential rights, the non-voting shareholders should only pay a 38% premium.

In addition, the investors are opposed to Olivetti's plan to use the money raised from the non-voting share holders to buy back voting shares at a 15% premium.

They argue that the buyback is both wasteful and illegal and discriminates against their preferential rights as shareholders.

Telecom Italia denies that it is illegal and insisted that it would only proceed with a restructuring if 80% of share holders backed it.