In the complaint, filed on March 21 and reviewed by Reuters, BT accuses several former Italy executives and other employees of breaking company rules and unlawful conduct. It comes five months after the phone company first revealed financial irregularities at BT Italy and took the first of two write-downs totaling 530 million pounds ($680 million). The complaint is consistent with allegations of irregularities and bullying first made public by Reuters on March 30. A BT official at the time declined to comment when asked if the company had filed a complaint.
Reuters first saw the complaint, which typically is not a document that is made publicly available, earlier this week. The Reuters investigation found that a network of people in BT Italy had exaggerated revenues, faked contract renewals and invoices and invented bogus supplier transactions in order to meet bonus targets and disguise the unit's true financial performance. All of these practices had been going on since at least 2013, current and former staff have said. The BT complaint asserts to prosecutors, who began investigating the unit's accounting problems in January, that BT is itself a victim of any fraud found to have taken place.
The company's director of ethics and compliance, Gareth Tipton, met Italian magistrates in Milan in the second half of February, two sources with knowledge of the investigation told Reuters. BT also gave prosecutors computer records collected during an internal investigation at the Italian unit in late summer 2016, the sources said. BT spokeswoman Gemma Thomas said in a statement: "We cannot comment on the ongoing investigation." Reuters contacted Tipton by email who referred to the statement from Thomas.
The complaint alleges misconduct against three former senior executives of BT Italy and two former employees, though it does not make a specific criminal accusation against any of them. It alleges former BT Italy chief executive Gianluca Cimini was responsible for grave violations of corporate governance rules in relation to contracts and suppliers, and for using intimidatory behavior when dealing with staff. It alleges former chief operating officer Stefania Truzzoli manipulated results that were used to award staff bonuses and that she also manipulated data that was communicated to BT Europe during the internal presentation of results. Cimini and Truzzoli declined to comment for this article. Truzzoli said she would respond to the allegations to the relevant authorities.
The BT complaint alleges former chief financial officer Luca Sebastiani failed to report financial irregularities to his managers and also induced an employee responsible for invoicing at BT Italy, Giacomo Ingannamorte, to issue fake invoices. It also alleges Luca Torrigiani, formerly responsible for government clients and other large accounts in Italy, violated BT's rules in the manner in which he chose suppliers and for receiving a payment from an agent of BT Italy. The complaint said Cimini, Truzzoli, Sebastiani, Ingannamorte and Torrigiani were all sacked. It did not elaborate on any of its allegations. Torrigiani's lawyer, Riccardo Chilosi, told Reuters that his client "strongly disputed" BT's allegations and was suing the company for unfair dismissal.
Ingannamorte told Reuters he too was appealing in court against his dismissal, adding that he issued the invoices in question at the behest of his supervisors.
In an email to Reuters, Sebastiani said he had only taken up the job of CFO at BT Italy in May 2016 and denied any wrongdoing, adding he considered his dismissal "totally unjustified". He said he could not be held responsible for any accounting practices that had been used by the company for years and that, also thanks to his input, had subsequently been the subject of a "critical review."
BT said in its complaint that it suffered financially from unlawful conduct, because the inflated results at BT Italy meant that it had paid bonuses to staff who did not merit them and that it had also paid taxes on income that did not exist.
BT's shares fell 20 percent when it announced its expanded writedown of 530 million pounds in January. That prompted several BT shareholders to file class-action lawsuits alleging the group misled investors and failed to promptly disclose the financial irregularities.
($1 = 0.7812 pounds)
(additional reporting by Agnieszka Flak, editing by Mark Bendeich and Anna Willard)
By Emilio Parodi