Shares in Campari tumbled on Monday after Italian tax police confiscated €1.3 billion (£1.1 billion) worth of stock linked to the drinks maker’s parent company amid an ongoing tax investigation.

Authorities ordered the seizure of shares held by Luxembourg-based Lagfin, which controls over half of Campari’s equity and holds about 80% of its voting rights.

The move is part of a year-long inquiry into a corporate restructuring that saw Lagfin absorb its Italian subsidiary.

According to Italian financial police, the case involves alleged undeclared capital gains between 2018 and 2020, on which Lagfin is accused of failing to pay an “exit tax”, a levy imposed when companies relocate their headquarters abroad.

Prosecutors began examining the matter last year, claiming the unpaid tax amount was roughly equivalent to the value of the shares now seized.

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So far, Lagfin has denied any wrongdoing, stating it had “acted according to tax laws.” In a statement, the company said the situation was “connected to a tax dispute that started approximately two years ago and has never involved Campari Group whatsoever.”

Campari itself also sought to distance the brand from the investigation, implying the issue did not concern it or any of its subsidiaries.

The group, whose portfolio also includes popular drinks brands Aperol Spritz and Courvoisier, added that it expected “no impact whatsoever” on its operations as a result of the case.

Despite the reassurances made, Campari’s shares fell approximately 6% in early Milan trading on Monday.

The market reaction came shortly after the company announced strong third-quarter results, with sales up 4.4% in the three months to the end of September and adjusted earnings rising 18.8%, a number well ahead of analyst expectations.