BT shares plummet as details of accounting scandal emerge

BT's stock market value fell by almost £8bn over the course of Tuesday, as the company revealed that the impact of an accounting scandal in its Italian business had been nearly four times worse than originally thought.

Jeremy Renner: starred in recent ad for BT Mobile
Jeremy Renner: starred in recent ad for BT Mobile

Shares in the telecoms company were at 382.55p at the close of Monday, but fell as low as 303.15p by the end of Tuesday. It was the worst single day for BT’s shares since it was privatised in 1986, the Telegraph reports.

The company’s remuneration committee will now consider whether to claw back bonuses and share-based incentives paid to chief executive Gavin Patterson and his senior colleagues.

Back in October, BT wrote down £145m on BT Italia after it discovered "certain historical accounting errors and reassessed certain areas of management judgement".

But after forensic accountants investigated, BT increased its estimate of the impact to £530m. It then issued a profit warning for both this year and next, stating that earnings before interest, tax, depreciation and amortisation would be £175m lower in each year.

Patterson said: "We need to take stock and understand why the company’s management, internal audit and our auditors failed to spot this."

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