UK telco BT Group has seen its share price plummet after being forced to write down the value of its business in Italy by GBP530 million (USD660 million) following an investigation into its accounting practices. In October last year BT announced that it had identified historical accounting errors at business services provider BT Italia which would necessitate a write-down of GBP145 million. An internal investigation by BT and an independent review by KPMG have now found, however, that the problems were much more widespread than originally feared and occurred over ‘a number of years’.
The group says that ‘inappropriate behaviour’ by staff at the Italian unit could affect its results for the next two years. A number of members of senior management at BT Italia were suspended and have now left the company, with a new CEO being installed from 1 February. The BBC reports that the market value of BT Group fell by GBP5.5 billion ‘in a matter of minutes’ this morning (24 January) as share prices plunged 19%.
Gavin Patterson, Chief Executive of BT Group, said: ‘We are deeply disappointed with the improper practices which we have found in our Italian business. We have undertaken extensive investigations into that business and are committed to ensuring the highest standards across the whole of BT for the benefit of our customers, shareholders, employees and all other stakeholders.’