BT in the dock after £530m accounts fraud: Italian prosecutors claim firm inflated revenues and invented bogus supplier transactions
Telecoms giant BT is facing a court trial over its £530million accounting scandal in Italy.
The firm’s Italian unit and 21 defendants, including three former executives, will be hauled before a Milan court on fraud charges in January.
It comes after they were indicted for alleged false accounting carried out in 2015 and 2016.
BT’s Italian unit and 21 defendants, including three former executives, will be hauled before a Milan court in on fraud charges in January
BT and the other defendants deny any wrongdoing. But an Italian judge yesterday decided there were grounds for a trial.
The company said: ‘We are disappointed. We remain confident in our defence.’
The full scale of BT’s Italian accounting scandal first became clear in 2017 when the company was forced to write off £530million from its balance sheet, a move that sent its shares plummeting.
Milan prosecutors have alleged that a network of BT Italy employees inflated revenues, faked contract renewals and invoices and invented bogus supplier transactions to disguise the unit’s true financial performance.
Of 23 individuals originally accused, a former manager of BT Italy has already been sentenced to one year’s imprisonment, while the former chief executive of the business died last year.
In the past, BT had said that it was co-operating with Italian authorities and believed it was the ‘injured party’ in any accounting irregularities in Italy.
But an explosive 353-page report by Italian police last year alleged that bosses in London repeatedly put pressure on managers at the foreign subsidiary to hit performance targets and encouraged the use of ‘aggressive, anomalous and knowingly wrong accounting practices’.
The claims contradicted previous statements by BT that the fraud scandal was a completely local matter.
Among the defendants the Milan judge has sent to trial are Luis Alvarez and Richard Cameron, respectively former chief executive and former chief financial officer of BT Global Services, and Corrado Sciolla, formerly BT’s head of continental Europe.
Alvarez and Cameron were based in London, but left the company in 2017, and are alleged to have been complicit in false accounting.
Roberto Pisano, a lawyer for Cameron, said: ‘Mr Cameron is extremely disappointed that the case against him is proceeding.
‘He is in no doubt that he acted properly and we are very confident that at trial he will be cleared of any allegation of wrongdoing.’
Charges relating to 2013 and 2014 financial statements were annulled due to the statute of limitations which wipes out trials if a verdict is not reached within a set timeframe.