Fast FT : BT Italian writedown balloons to £530m after ‘accounting errors’

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UK telecoms company BT is in a much trickier spot in Italy than it previously thought, jacking up the scale of the writedowns it will face over what it calls “improper behaviour” in the country to £530m, from an earlier estimate of £145m. The company has also appointed a new CEO for its Italian business, starting in February, and suspended a number of the senior management team in the country. The rising costs follows an independent investigation into historical accounting errors by KPMG. The telecoms company says today:

These investigations have revealed that the extent and complexity of inappropriate behaviour in the Italian business were far greater than previously identified and have revealed improper accounting practices and a complex set of improper sales, purchase, factoring and leasing transactions. These activities have resulted in the overstatement of earnings in our Italian business over a number of years. We are still evaluating what proportion of the total adjustments should be treated as prior year errors, and what proportion should be treated as the reassessment in the current year of management estimates.

CEO Gavin Patterson said he was “deeply disappointed” with what has been discovered, adding that “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.”