BT share price plummets as group are rocked by Italian scandal
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by Abi Moses on 26th January, 2017 and updated 10th February, 2017 10:27am
BT and their shareholders continue to suffer following the shocking revelations of the scandal that has rocked their Italian subsidiary, BT Italia.
The discovery of accounting irregularities at BT Italia last summer are significantly worse than first feared and on Tuesday the firm experienced its worst day's trading since privatisation. Share prices have plunged by more than 20% already this week.
Financial problems in its Italian business were initially estimated at £145m, a long way off the huge figure of £530m confirmed by BT earlier this week.
KPMG were brought in to oversee the investigation and their findings have led to several high-profile resignations already. BT finance director Simon Lowth said:
"The KPMG investigation had uncovered that BT Italia management were artificially depressing its cost base to appear more profitable than it actually was."
Fabio De Pasquale, the man behind the 1990's public corruption case against Silvio Berlusconi has confirmed that prosecutors in Italy have opened a criminal investigation against the Italian business. De Pasquale claimed the focus of the investigation was allegations of "false accounting and embezzlement" but would not reveal any further information.
BT have so far declined to comment on whether they or the former BT Italia executives are the subject of the pending Italian investigation.
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