MILAN, March 22 (Reuters) - Bank of Italy has placed

Banca Progetto, a small privately-held lender owned by

investment firm Oaktree Capital Management, under special

administration and appointed independent administrators to run

it.

Bank of Italy's "early" intervention, which dissolved the

board, was aimed at "ensuring adequate supervision of the bank's

operations and restoring sound and prudent management

conditions", Banca Progetto said in statement late on Friday.

In October, the lender was placed under court administration

and its headquarters raided by tax police for allegedly lending

money to a person arrested on mafia charges.

Last year Oaktree struck a deal to sell Banca Progetto,

which is focused on lending to small- and mid-sized Italian

businesses, to funds managed by private equity firm Centerbridge

Partners, but the transaction was never finalised.