According to the latest reports, the boss of BT’s Continental European operation is to resign after the company was forced to write-down the worth of its Italian unit by £530 million after years of “inappropriate behavior”.
BT’s shares dropped 21% following the news that the Italian scandal would cost far more than the £145 million initially anticipated. The company also cautioned this might affect its results for the next couple of years.
Meanwhile enquiry of BT’s Italian business, which included a sovereign review by accountancy firm KPMG, established inappropriate accounting practices and “a multifaceted set of wrong sales, purchase, factoring and leasing transactions”.
It added: “These activities have resulted in the overstatement of earnings in our Italian business over a number of years.”
Mr. Corrado was chief executive of BT Italy from 2006 before his remit expanded in 2011 to include France.
Mr. Corrado was then appointed as president of BT’s Continental Europe operation in the start of 2013, where he was supervised by Luiz Alvarez, the chief executive of the company’s global services business.
Moreover to its glitches in Italy, BT also said the outlook for the UK public sector and global corporate markets had weakened.
Consequently, BT now anticipates operating profit for the current fiscal year to be £7.6 billion, in contrast to the company’s forecast of £7.9 billion, and revenue to be flat. It also predicts that both sales and profit will be flat for the year to March 2018.
Accusations of wrong behavior at BT’s Italian operation first appeared last summer before the company initiated probe in October.