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| BT takes £530m charge over 'improper practices' in Italy | |
| (35 minutes later) | |
| BT Group has been forced to write down the value of its Italian business by £530m following "inappropriate behaviour" over a number of years. | |
| The sum is far higher than the £145m BT initially anticipated and will affect its results for the next two years. | The sum is far higher than the £145m BT initially anticipated and will affect its results for the next two years. |
| BT began investigating accounting practices in Italy last October. | BT began investigating accounting practices in Italy last October. |
| It since emerged that the problems were "far greater than previously identified" and went back over "a number of years". | It since emerged that the problems were "far greater than previously identified" and went back over "a number of years". |
| The charge will affect BT's results both for this year and next. | |
| For the 2016-17 financial year, revenue will fall £200m and underlying earnings will be £175m lower. It expects to take a similar hit on group sales and earnings for the following financial year. | |
| BT said it has suspended a number of BT Italy's senior management team who have now left the business. It has appointed a new chief executive of BT Italy who will take charge on 1 February. | BT said it has suspended a number of BT Italy's senior management team who have now left the business. It has appointed a new chief executive of BT Italy who will take charge on 1 February. |
| BT group chief executive Gavin Patterson said: "We are deeply disappointed with the improper practices which we have found in our Italian business. | 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." | "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 investigation, which included an independent review by accountancy firm KPMG, found improper accounting practices and "a complex set of improper sales, purchase, factoring and leasing transactions. | |
| It said: "These activities have resulted in the overstatement of earnings in our Italian business over a number of years." | |
| The company said that the new chief executive of the Italian business will review the local management team and "will work with BT Group ethics and compliance to improve the governance, compliance and financial safeguards in our Italian business". |