BT Group boss Gavin Patterson to forfeit bonus award over Italian accounting scandal

 
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BT boss Gavin Patterson has been chief executive since 2013 (Source: Getty)

BT Group boss Gavin Patterson will forfeit his bonus this year because of the accounting scandal at the telecoms company’s Italian operations, according to reports.

The group’ remuneration committee decided to veto the payouts to Patterson and former finance director Tony Chanmugam, Sky News said, citing sources.

Patterson himself asked BT’s chair, Sir Mike Rake, to suspend his bonus, according to Sky News’ sources.

Read more: Here's what analysts expect for BT's fourth quarter results

Patterson’s maximum possible bonus was 240 per cent of salary, which was £996,825 this financial year, according to BT’s last annual report.

Patterson’s salary in the financial year ending in 2016 was £969,000 plus a bonus of £1.06m, the report said.

The accounting scandal around BT’s Italian operations emerged in January this year, wiping £7bn from the telecoms giant’s market capitalisation in one day.

In October BT revealed an internal investigation into “historical accounting” errors had unearthed £145m of writedowns.

Read more: BT's overseas operations put under review

However, after calling in external accountants from KPMG, the FTSE 100 firm said in January that the costs associated with the scandal had ballooned to £530m.

A number of accounting irregularities were at play in Italy, reports said, including the use of arcane debt factoring structures to mask the performance of the business.

Patterson has been chief executive since September 2013, and has served on the Board since June 2008. He was previously boss of the BT Retail arm.

Chanmugam was formerly chief financial officer of BT Retail, before coming finance chief and then chief operating officer of BT Global Solutions, the unit responsible for the Italian operation, until 2004.

BT Group declined to comment.

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