UPDATE 2-Leonardo investors reject liability action against CEO

(Updates with Leonardo’s statement)

MILAN, May 19 (Reuters) - Shareholders in Leonardo rejected a proposal by activist investor Bluebell Partners to launch a liability action against the Italian defence company’s CEO, the group said on Wednesday.

CEO Alessandro Profumo was sentenced last year in the first instance to six years imprisonment for false accounting in his previous role as chairman of Banca Monte dei Paschi di Siena .

Activist investor Bluebell Partners, which owns 25 shares in the defence group, last month proposed launching a liability action against Profumo and seeking damages deriving from the conviction.

In October, Leonardo had backed Profumo, saying “conditions did not exist” for him to resign as his conviction could be overturned by appeal courts.

Investors accounting for 99.3% of the share capital represented at Leonardo’s annual shareholder meeting on Wednesday voted against Bluebell Partners’ proposal, Leonardo said in a statement.

Reuters had reported earlier, citing sources, that shareholders voted against the proposal and that the economy ministry, which controls the defence group with a 30% stake, also voted against the proposal, reserving the right to assess future developments in the ongoing legal proceedings involving Profumo.

Profumo was appointed as CEO of Leonardo in 2017 and is serving a second term due to expire in 2023.

Reporting by Francesca Landini, editing by Cristina Carlevaro, Jason Neely and Jane Merriman