* SNI: Consolidated earnings do not reflect 2010 performance
* SNI under greater public scrutiny amid protests
By Souhail Karam
RABAT, April 15 (Reuters) - SNI, the investment holding company controlled by Morocco's royal family, said its 2010 consolidated earnings were bolstered by a merger and its performance last year was not as rosy as it seemed.
This week's announcement of a surge in consolidated net profit and assets came amid persistent street protests for King Mohammed to give up political powers and reduce his business clout.)
In August SNI and ONA Group, in which SNI already held a majority stake, both delisted from the Casablanca bourse to pave the way for a merger that would see ONA transfer all its assets to SNI.
In an email sent to Reuters, SNI said the 8.3 billion dirhams ($1.05 billion) it reported as consolidated net profit for 2010 included 6.4 billion dirhams generated from the adoption of International Financial Reporting Standards (IFRS) in the accounting processes for the merger of SNI and ONA".
"It should be noted that SNI posts a strong drop of 40 percent in its statuory net profit at 648 million dirhams in 2010 against 1.1 billion dirhams in 2009," it said.
The drop was due to the payment of "487 million dirhams in taxes linked to the SNI-ONA merger and a rise in financial costs" from SNI's purchase of ONA shares.
A market source had told Reuters the rise in SNI's consolidated net profit "appears to have been fuelled by capital gains on the transfer to SNI of assets ONA owned in listed firms".
The political upheaval that has swept across North Africa triggered a wave of protests in Moroccan cities calling for political reform although not an end to the monarchy. Morocco's leaders are desperate to prevent the unrest intensifying.
The protest movements and many business leaders say firms controlled by the king and his close inner circle dominate key economic sectors. At times, demonstrators have carried placards reading 'SNI degage' -- or 'SNI clear off'.
SNI holds 48.3 percent stake in Morocco's biggest bank AttijariWafa, 50 percent in its biggest cement firm Lafarge Maroc, 63.4 percent in its biggest dairy firm Centrale Laitiere and 63.6 percent in its sole sugar refiner Cosumar.
SNI also has stakes in steel, supermarkets, telecommunications, insurance and renewable energy. Some of those stakes are up for sale, including AttijariWafa, Cosumar and Lesieur.
Siger, the firm that groups the main business interests of the Moroccan royal family, holds a stake of around 60 percent in SNI, market sources said. SNI did not comment on that figure. (Editing by Richard Lough and Mark Potter)