(Adds dropped word in the third paragraph to show BlackRock did not inform Consob)
MILAN, Dec 15 (Reuters) - Italian watchdog Consob may fine the world's biggest money manager BlackRock Inc for not informing the regulator soon enough that it had increased its stake in Italy's Telecom Italia, Consob's chairman told an Italian daily.
At the end of November BlackRock lifted its holding to 10.1 percent from the 5.1 percent it held in October, giving it a potentially pivotal role in a Dec. 20 shareholder vote on whether to oust the board of the telecoms firm.
BlackRock informed the U.S. Securities and Exchange Commission about its investment at the beginning of December but it did not tell Consob within a five-day deadline.
The regulator has asked the U.S. group to make a stock exchange statement on what its stake in the Italian company is and whether it intends to be present at the next shareholders meeting on Friday, Consob's Giuseppe Vegas told daily Il Sole 24 Ore on Sunday.
BlackRock is required to answer before trading starts on Monday.
"Our immediate reaction is the sanction procedure, we can impose a fine of maximum 500,000 euros ($700,000)," Vegas was quoted as saying by the newspaper.
Consob could also temporarily suspend BlackRock's voting rights on the stake not declared, Vegas said.
An official for BlackRock declined to comment.
With its November investment, BlackRock became the second-largest shareholder in Telecom Italia.
According to Vegas, BlackRock continued to buy shares in December. It is unclear by how much the U.S. investor had increased its stake from 10.1 percent, he said.
Telecom Italia was also required to make a statement to the exchange on when it was informed by BlackRock about its investment by before the market opens on Monday, Vegas said.
(Reporting by Francesca Landini in Milan Additional reporting by Christopher Vellacott; Editing by Louise Ireland)