Shock profit warning from BT this morning, in an update that arguably couldn’t have been more negative. Firstly, an accounting scandal from its Italian arm which was initially thought to cost around £100 million has now ballooned to just over £530 million. From what was Britain’s national telecom carrier until privatisation in 1984, this accounting scandal will surprise many. Certainly, the magnitude is surprising. As you would imagine, shares are sharply lower this morning in general disorderly trading – and are now down 19% on the day at 308p. From BT’s own statement, apparently two senior executives have been suspended due to this – clearly, investigations are ongoing but for me, it fills me with trepidation. Could this just be isolated to the Italian arm or could this spread to other parts of the business?
Jordan Hiscott, Chief Trader
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