The Italian Sea Group – Budget Fraud, Governance Collapse, and a Share Price in Free Fall

The Italian Sea Group is Italy’s leading builder of luxury megayachts over 50 metres and the third largest in the world. Founded and led by Giovanni Costantino. TISG operates four brands — Admiral (flagship, gigayachts >70m), Tecnomar (sport motor yachts), Perini Navi (sailing superyachts) and Picchiotti — alongside its NCA Refit division, one of the most important refit centres in the Mediterranean. CEO and founder Giovanni Costantino controls the company through GC Holding with a 53.6% stake. Notable minority shareholders include Alychlo, the family office of Belgian billionaire Marc Coucke (11.4%), and Giorgio Armani (4.99%).

The company’s trajectory had been exceptional during the last 15 years. From €23.6 million in revenues in 2009, TISG reached over €400 million in 2024, compounding at 21% annually for fifteen years. It went public in 2021, used the IPO proceeds to acquire Perini Navi out of bankruptcy, doubled its production capacity through three successive investment rounds (TISG 4.0, 4.1 and 4.2), and by 2024 had become – by far – the best-performing listed shipyard in Europe.

The stock peaked at an all-time high of €11.28 in March 2024, driven by a record backlog and a series of high-profile deliveries. MORAM Capital was the first independent research firm to cover the stock, and we were shareholders until February 2024, when we published our well-known (and at the time highly controversial) article “Time to Jump the Ship.” The past two years have been challenging for the industry due to the normalization of orders following the post-COVID peak, but especially for The Italian Sea Group, which has had to deal with the sinking of the Bayesian — a 56-metre Perini Navi sailing yacht that killed seven people, including British tech billionaire Mike Lynch. The incident inflicted lasting reputational damage on the Perini Navi brand, leading to a subsequent decline in sales and, more recently, internal governance and management scandals. At the time of writing this article, the stock is trading at around €2.

Chronology of the fall from grace of The Italian Sea Group

The Current Crisis of the Italian Sea Group

3.1 Operational: Falling Behind Peers

TISG’s order intake looks superficially acceptable at €246m but masks a structural problem: Q1 and Q2 were near-empty at €79m and €37m respectively, with Q3 rescued by contracts announced with considerable fanfare by Costantino. Meanwhile Sanlorenzo and Ferretti are running at three times TISG’s intake pace. The sales line tells the starker story – TISG is executing a thinning inherited backlog while peers compound theirs. The net backlog has eroded from €433m at end-2024 to ~€362m by H1 2025, and that figure predates whatever KPMG finds on the cost overruns embedded in those same contracts.

3.2 Management Credibility: A Pattern of Overpromising

• Costantino’s communication style had already eroded market trust before February. The phrase “negotiations for large yachts expected to close between year-end and early next year” appeared in results statements for 2023, 2024 and H1 2025 — each time without the contracts materialising at the promised pace.
• The mid-year guidance cut from €410–430m to €350–370m was framed as an external market phenomenon. We now know the internal cost erosion was already compounding. The market was not given the full picture. And as we said when they reduced the guidance, we believe they are not going to achieve it. Now it seems clear.
• With FY2025 accounts delayed, no accounting officer in post, and a CEO whose version of events is publicly disputed by his former Chairman and CFO, there is currently no reliable information anchor. The next audited data point is not expected before June 2026 at the earliest.
• If KPMG establishes that overruns accumulated from 2023 or 2024, every set of published financials since then carries restatement risk. That would expose the company to Consob scrutiny and potentially to minority shareholder claims – a legal overhang that could outlast the operational crisis itself.

3.3 Governance: Costantino Consolidates, Everyone Else Leaves

• The board has been hollowed out. Following three resignations in a single day, Costantino now holds CEO and Chairman simultaneously – the precise outcome that departing independent director Tadini publicly opposed before resigning.
• The appointment of his son Gianmaria as Chief Commercial Officer in 2024 had already signalled a dynastic management structure difficult to reconcile with the governance expectations of an Euronext Star-listed company.
• The Art. 154-bis accounting officer role remains vacant. No qualified professional is willing to certify financial statements currently under forensic review. This is not a technicality – without this role filled, TISG cannot publish audited accounts.
• Departing directors Menchelli and Carniani stated they will independently investigate Costantino’s management “in recent years” – not merely the February events. The temporal scope of that phrase matters.
• The banking position is the other unknown. Covenant headroom is undisclosed, and if prior accounts are found to be materially misstated, lenders may have grounds to accelerate debt. Whether the syndicate supports a liquidity facility or tightens terms will do more to determine the resolution path than anything management communicates publicly.