A BITTER family feud over the legacy of Gianni Agnelli — the late chairman of Fiat whose lovers included Jacqueline Kennedy — will be fought out in a Turin courtroom this week. At stake are the dynasty’s prestige, a multi-billion-pound fortune and an enormous tax demand.

The case pits Agnelli’s grandson John Elkann, the car group’s deputy chairman, and the rest of his family against his mother, Margherita Agnelli de Pahlen, who believes she was cheated out of a fortune in her father’s will.

She alleges that Agnelli, who died in 2003 aged 81, hid much of his wealth overseas and that she was tricked by his advisers into accepting a mere £1.2 billion. The assets she claims were concealed from her include bank accounts, moorings on the French Riviera, luxury flats in Paris and New York and valuable paintings and shares.

Known as the unofficial king of Italy, Agnelli ruled an empire that ranged from Fiat and Ferrari to banks, newspapers, the Château Margaux vineyard and Juventus football club.

His legion of lovers included the actresses Rita Hayworth and Anita Ekberg. His wife Marella Caracciolo di Castagneto, a former Vogue model, once said of him: “For Gianni, a woman is to be conquered, not loved.”

Agnelli hand-picked Elkann, now 33 but then aged 21, as the heir to his business empire after his first choice, his nephew Giovannino, died of stomach cancer in 1997.

“I saw him here [in the office], or maybe on the boat. I would ask questions, and he always answered,” Elkann recalled in a rare interview in 2006.

Agnelli was impressed. “John is young but he has already demonstrated that he has remarkable abilities and moral qualities,” Agnelli declared when he announced his appointment to the Fiat board. Elkann was given hands-on experience of the car industry by working at a Birmingham headlight factory and a Polish assembly line.

In 2003 Elkann became deputy chairman of Fiat and of IFIL (now Exor), the family holding company worth £3.6 billion. His marriage to Princess Lavinia Borromeo on an island in Lake Maggiore drew guests including Silvio Berlusconi, the Italian prime minister, Henry Kissinger, the former US secretary of state, and Elle Macpherson, the model.

Elkann is widely respected in business circles and has weathered turbulent times in the car industry but little in his grandfather’s painstaking on-the-job training could have prepared him for the legal action brought by his mother, Margherita, 53, against three of Agnelli’s long-time advisers over the will.

“I am very hurt as a son and surprised by this private matter,” he said.

Margherita’s mother, Marella, sided with him, as did his younger brother Lapo, who narrowly escaped death from a cocaine and heroin overdose at the home of a transsexual prostitute in 2005. “There’s no room in my life for my mother,” Lapo announced.

Margherita further fuelled the flames by publicly denouncing Agnelli’s advisers. “Someone took my sons hostage,” she claimed. “Were I not morally strong, I would have jumped off a bridge as my brother did” — a reference to Agnelli’s only son, Edoardo, who committed suicide by leaping off a motorway bridge in 2000.

To add to the dynasty’s woes, Margherita’s accusations prompted Italy’s tax inspectors to mount an investigation into Agnelli’s fortune, alleging that £900m may have been hidden in Switzerland to avoid inheritance tax.

Elkann, as the head of the Fiat empire, flew to his grandfather’s defence. Rejecting the tax-dodging claims, he said that he was “outraged by the manipulations, the violence of the words and the falsehoods said about my grandfather”.

Amid speculation that the controversy over the will could undermine his position as head of the group, Elkann insisted: “[There’s] no impact on Fiat; we’re looking to the future.”

Agnelli’s memory was also defended by his old friend Kissinger. “It hurts me to see that my friend, who is not here to defend himself, is having his name sullied ... Agnelli, a tax dodger? I don’t believe it,” he said.

In a speech to business leaders last month, Elkann referred to the feud, saying: “Negative things have happened in the past few years — trials, quarrels and mishaps — but there have also been positive things, like weddings and baptisms.”

Asked whether his family could ever make peace, he replied: “Peace is always desirable.” But a Fiat source explained that the remark was “just a throw-away comment”. The source added: “Elkann isn’t devoured by rancour against his mother; he doesn’t hate her. But quite frankly we don’t see any hope of a peaceful solution.”

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