BT European chief set to resign over Italian scam

Company - Mohit Shah - Jan 25,2017

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bt european chief set to resign over italian scam


Head of BT's Continental Europe operation will be soon resigning after the company was forced to decrease the value of its Italian unit by £530m post the Italian scandal.

BT's shares dipped 21% after the announcement related to the exact cost of the Italian scandal, which is greater than the initially expected £145m.

According to sources, Corrado Sciolla would be shortly resigning.

Mr. Corrado was chief executive of BT Italy since 2006 before his remit extended in 2011 to include France.

In January 2013, he was designated to become the president of BT's Continental Europe operation, where he had to report to the chief executive of the company's global services business, Luiz Alvarez.

The investigation of BT's Italian business included an independent audit by accountancy firm KPMG. The findings involved improper accounting practices and a complicated set of improper purchase, sales, factoring and leasing transactions.

In addition to the problems in Italy, BT also pointed the outlook for the UK public sector and deterioration of the international corporate markets.

BT has formed new expectations on the operating profit for the current financial year to be somewhere around £7.6bn. The company also forecasts that both sales and profit will remain flat for the year to March 2018.

It was noted that BT's shares dropped significantly as soon as trading began, and by midday, it was marked 18% at 313.55p.

The telecommunications company said it had suspended several BT Italy's senior management team members who have currently left the business. It includes former chief executive Gianluca Cimini along with chief operating officer Stefania Truzzoli.

Moreover, the company will examine whether to gain back any bonuses paid to them over the two-to-three-year time span in which major accounting inconsistencies have been detected.

Chief executive of BT group Gavin Patterson stated, "We are deeply disappointed with the improper practices which we have found in our Italian business.”