(Bloomberg) BT Group Plc’s continental Europe chief Corrado Sciolla has resigned as the fallout from an accounting scandal at the British phone carrier’s Italian unit spreads.
Tower above BT headquarters in London
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 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.”
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. Prosecutors in Milan have opened a criminal probe into allegations of false accounting and embezzlement, following disclosure of a 530 million-pound ($663 million) writedown 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.
The former British phone monopoly suffered a 21 percent stock drop on Jan. 24 after lowering its profit outlook because of the worse-than-expected accounting debacle in Italy and weaker performance in its U.K. government and international corporate businesses. BT cited “inappropriate behavior” 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 Officer Gavin Patterson, who took the helm in 2013. The writedown was more than triple the original 145 million-pound estimate when the company disclosed an internal probe in October.
- Daniele Lepido and Rebecca Penty