SECURITIES AND EXCHANGE COMMISSION
                         Washington, D.C.

LITIGATION RELEASE NO. 15164 / November 21, 1996

ACCOUNTING AND AUDITING ENFORCEMENT 
RELEASE NO. 859 / November 21, 1996   
 
SECURITIES AND EXCHANGE COMMISSION v. MONTEDISON, S.p.A,
Defendant, Civil Action No. 1:96CV02631 (HHG) (D.D.C. November
21, 1996)

     The Securities and Exchange Commission announced today that
it filed a civil injunctive action in the United States District
Court for the District of Columbia charging Montedison, S.p.A.
("Montedison") with committing financial fraud by falsifying
documents to inflate artificially the company's financial
statements.  The Commission's complaint also charges Montedison
with violating the corporate reporting, books and records, and
internal control provisions of the Securities Exchange Act of
1934 ("Exchange Act").

     Montedison, an Italian corporation with headquarters in
Milan, has interests in the agro-industry, chemical, energy and
engineering sectors.  Since July 1987, American Depositary
Receipts ("ADRs"), each representing ten shares of the company's
common stock, have been listed on the New York Stock Exchange. 
The ADRs are registered under Section 12(b) of the Exchange Act,
and the company files reports with the Commission in Washington,
D.C. pursuant to Section 13(a) of the Exchange Act.  The company
files annual reports with the Commission on Form 20-F.

     The Commission's complaint alleges that Montedison violated
the antifraud provisions of the Exchange Act by engaging in a
fraudulent scheme to materially misstate its financial condition
and results of operations on its books and records and in its
reports filed with the Commission and disseminated to the
investing public.  This fraudulent scheme continued from at least
1988 through the first half of 1993.  The complaint alleges that
the scheme was designed to conceal hundreds of millions of
dollars of payments that, among other things, were used to bribe
politicians in Italy and other persons.  The scheme concealed
losses of at least $398 million.  The complaint alleges that as a
result of the scheme, Montedison's assets were materially
overstated on its books and records and in its financial
statements for its 1988, 1989, 1990 and 1991 fiscal years. 

     The complaint alleges two examples of Montedison's
fraudulent conduct:  the "Exilar Loan" and the "ENIMONT Affair." 
According to the complaint, the Exilar Loan was a fraudulent
accounting entry used to disguise and aggregate as an asset on
the company's balance sheet numerous questionable payments or
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bribes that had been made from at least December 1988 through May
1993.  In the latter half of 1993, Montedison determined that the
Exilar Loan was uncollectable, and took a write-down in the
amount of 435 billion lire (approximately $272 million, at $1 =
1,600 lire) for the company's 1992 fiscal year.  The complaint
alleges that The ENIMONT Affair involved fraudulent accounting
entries involving overstated real estate values to disguise
numerous bribes on the company's books and records from at least
1990 through 1992.  The fraudulent entries resulted in a write-
down on the company's 1993 financial statements of 202 billion
lire (approximately $126,250,000). 

     In its complaint, the Commission requests that the court: 
(i) enter findings that Montedison violated Exchange Act Sections
10(b), 13(a), 13(b)(2)(A) and 13(b)(2)(B) and Rules 10b-5, 12b-20
and 13a-1 thereunder; (ii) grant a permanent injunction
restraining and enjoining Montedison from violating such
provisions; and (iii) order Montedison to pay a civil penalty
pursuant to Exchange Act Section 21(d)(3).