The head of continental Europe at crisis-hit telecommunications giant BT is leaving after the company earlier this week announced that an accounting scandal at its Italian business was far bigger than originally feared, causing shares to suffer their worst day in history.
BT on Friday said that Corrado Sciolla is leaving as the accounting scandal “happened on his watch”.
Close to £8bn was wiped off the market value of BT on Tuesday after the company slashed its earnings forecast for this year and next, citing accounting errors in its Italian business that the company said were “far greater” than previously expected.
“The good progress we're making across most of the business has unfortunately been overshadowed by the results of our investigation into our Italian operations and our outlook,” Gavin Patterson, chief executive of BT said on Friday.
“I am deeply disappointed with the unacceptable practices by some that we've found,” he added.
On Friday, the company reported a 59 per cent drop in basic earnings per share for the third quarter to the end of December. Revenue rose 32 per cent, but profit before tax fell 37 per cent for the period.
The network provider in October last year already said that an initial internal investigation of accounting practices in the Italian business had brought to light “historical accounting errors and areas of management judgement requiring reassessment”.
On Tuesday, however, it said that further investigation, which included an independent review by the professional services firm KPMG, “revealed that the extent and complexity of inappropriate behaviour in the Italian business were far greater than previously identified”.
BT said that the investigation had “revealed improper accounting practises and a complex set of improper sales, purchase, factoring and leasing transactions” and that the write-down for the business had risen from a previously expected £145m to around £530m.
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