British Telecom's Italian job had London roots: investigators

Milan

A CRIMINAL investigation into accounting fraud inside British Telecom's Italian unit has uncovered more evidence of what prosecutors say was the involvement of senior executives in artificially inflating the division's financial performance.

Emails seized by the police and reviewed by Reuters show for the first time why Italian prosecutors allege that top BT employees were at the heart of the problem, contrary to the company's assertions that managers at the head office knew nothing about the misconduct. "A series of emails between the top financial executives of BT Plc and managers of the (Italian) unit point to the existence of "insistent" requests by the leadership of the parent company aimed at achieving ambitious economic targets, even using aggressive, anomalous and knowingly wrong accounting practices," Italy's financial police said in a 353-page report.

The report has not been made public and its contents have not previously been reported.

The report contains emails from Brian More O'Ferrall, currently finance director at BT Wholesale, the company's business-to-business division, in which he asks colleagues in Italy to find ways of adjusting their accounts to boost profits.

At the time, Mr O'Ferrall was chief financial officer (CFO) for BT Europe, the European part of Global Services, one of the company's biggest businesses. Mr O'Ferrall did not respond to Reuters' requests for comment.

BT declined to make O'Ferrall or group Chief Executive Philip Jansen available for interview. REUTERS