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BT Europe chief quits as Italian accounting scandal drags on

Corrado Sciolla resigns after accounting debacle sends phone carrier’s shares plunging

BT suffered a 21 per cent stock drop on January 24th after lowering its profit outlook. Photograph: Reuters

Fri Feb 10 2017 - 17:41

BT Group's continental Europe chief Corrado Sciolla has resigned as the fallout from an accounting scandal at the British phone carrier's Italian unit spreads.

Sciolla, who spent more than a decade at BT in roles including head of Italy, resigned to pursue other opportunities, BT said in an email on Friday. Luis Alvarez, the head of BT's global services division, is assuming Sciolla's duties on an interim basis.

“Corrado Sciolla has decided to resign in order to pursue new professional opportunities,” BT said.

“Corrado has made many positive contributions to BT during his time with the company. We would like to thank him for his commitment to the company.”

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Sciolla’s departure follows the disclosure of a deeper accounting debacle in Italy by BT last month, which sent its shares plunging and challenged its credibility in the eyes of analysts and investors.

Criminal probe

Prosecutors in Milan have opened a criminal probe into allegations of false accounting and embezzlement, following disclosure of a €622 million write-down over the irregularities. Prosecutor

Fabio De

Pasquale said last month that the investigation wasn’t then focused on any specific individual.

Sciolla signed an agreement to leave on Thursday after negotiating his severance terms over the past two weeks, said people familiar with the matter, asking not to be identified as the details aren’t public. He may now join the private-equity industry, they said.

Representatives for BT declined to comment beyond the statement. The carrier said last month Sciolla would be leaving the company because the irregularities “happened on his watch”.

BT already appointed company veteran Andrea Giovanni Bono to take over the Italian unit as of the start of this month.

Former BT Italia chief Gianluca Cimini was suspended in September with local operating chief Stefania Truzzoli. Both have since left the company.

Weaker performance

The former British phone monopoly suffered a 21 per cent stock drop on January 24th after lowering its profit outlook because of the worse-than-expected accounting debacle in Italy and weaker performance in its UK government and international corporate businesses.

BT cited “inappropriate behaviour” and “improper accounting practices” going back several years in Italy, meaning a business it had said was profitable had long been losing money.

The Italian scandal represents a blow to the leadership of chief executive Gavin Patterson who took the helm in 2013.

The write-down was more than triple the original €170 million estimate when the company disclosed an internal probe in October.

– (Bloomberg)

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