BT’s President of Continental Europe, Corrado Sciolla, is expected to resign this afternoon after BT Italia was devalued by £530m prompting a 19% fall in share prices this morning.
The chief of BT’s Continental Europe operation is set to resign after the company has devalued its Italian division by £530m.
Corrado Sciolla, BT’s President of Continental Europe, is expected to resign this afternoon after a report into suspect accountancy issues within the comampany’s Italian division found it to be grossly overvalued.
The company was initially expected to be devalued by up to £145m but following an independent review, conducted by accountancy firm KPMG, it was announced that the figure was more than triple earlier estimates at £530m.
BT stated that “a complex set of improper sales” had led to “the overstatement of earnings in our Italian business over a number of years.”
The news prompted shares in the telcom to fall a huge 19% during early trading before stabilising at 18% at midday. This action has affected the value of BT by £6 billion which the telecommuncations company blamed years of “inappropriate behaviour” in its accounting department which were “far greater than previously realised”.
Mr Sciolla became CEO of BT Italy following the company’s acquisition of Albacom in 2006, and in 2011 was made President of BT France as well. In 2013 he was appointed as the company’s President of Continental Europe and Latin America where he reports to the Global Services CEO, Luiz Alvarez.
BT Group chief executive, Gavin Patterson, 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.”
The company began investigating the claims of irresponsible business practices in October of last year after rumours began circulating in summer.
The news also came amid the company’s warning that it is expecting a double digit decline in fourth quarter revenue from it’s UK public sector and international corporate business.