cost of mont blanc pens BT European chief to resign over Italian scandal
The boss of BT’s Continental European operation is to resign after the firm was forced to write down the value of its Italian unit by 530m after years of “inappropriate behaviour”.
BBC business editor Simon Jack said Corrado Sciolla was expected to resign shortly.
The investigation of BT’s Italian business, which included an independent review by accountancy firm KPMG, found improper accounting practices and “a complex set of improper sales, purchase, factoring and leasing transactions”.
From 2006, Mr Corrado was chief executive of BT Italy before his remit expanded in 2011 to include France.
In January 2013, he was appointed as president of BT’s Continental Europe operation, where he reported to Luiz Alvarez, the chief executive of the company’s global services business.
Market ‘jitters’In addition to its problems in Italy, BT also said the outlook for the UK public sector and international corporate markets had “deteriorated”.
As a result, BT now expects operating profit for the current financial year to be 7.6bn, compared to previously guidance of 7.9bn, and revenue to be flat. It also forecasts that both sales and profit will be flat for the year to March 2018.
BT’s shares dropped sharply as soon as trading began, and by midday were down 18% at 313.55p.
BT has an estimated one million small shareholders after becoming one of the first state owned business to be privatised under Margaret Thatcher’s government.
George Salmon, equity analyst at Hargreaves Lansdown, said: “With the group’s net debts pushing 9.6bn following the acquisition of EE, and a review of the how to fund the 9.5bn pension deficit coming up in June, there were already a few jitters around the stock, so this was the last thing the group needed.”