BT CEO Gavin Patterson has told CNBC how "extremely angry" he is about the accounting scandal in his company's Italian arm, adding that "that type of fraud has no role to play in our business at all."
Reflecting on events, Patterson said that he was "very disappointed that a few individuals have tarnished the name of the company overall," and added that he was "determined to ensure that that sort of behavior does not exist anywhere in BT."
At the start of 2017, prosecutors in Milan confirmed they were looking into BT's Italian business over alleged embezzlement and false accounting. As a result of the investigations, BT wrote down the value of its Italian branch by £530 million. According to Reuters, BT's shares tanked in their worst ever daily fall on Tuesday 24 January, plummeting to a three and a half year low.
Patterson sought to reassure shareholders, saying to CNBC that "we're sure we've been able to scale the financial impact" of the scandal, adding that he was "absolutely confident that we've been able to box this in into Italy and we'll talk more about it when we get to (fourth quarter) results."
Patterson told CNBC that the problem was actively being addressed, with the company undertaking "further review of what we can learn or what we could have done better," which so far includes putting new management in place and looking out for similar problems in its other global services. He conceded that the company had "more to do to build investor confidence."
Paterson was speaking to CNBC following an announcement that BT has agreed to siphon off its Openreach arm – which runs its broadband operations in the U.K. – into a legally separate entity. Rivals accuse Openreach of delivering poor service. The deal was struck with British telecoms regulator Ofcom, and it is stipulated that Openreach will have its own branding, chief executive and board.
Affirming his support for the decision, Patterson told CNBC that the deal involved "tough negotiation" but had led to a "fair outcome." He added that the decision was "absolutely critical for the country to thrive in a Brexit world."