Investors kick out at PwC at BT’s AGM for failure to detect Italy fraud

Helen Cahill
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BT was forced to pay a hefty fine for the fraud that took place in its Italian arm (Source: Getty)

Investors protested against BT’s auditors, PwC, at the firm’s annual general meeting yesterday, following the scandal in BT’s Italian business.

Nearly a quarter (22 per cent) of of investors expressed their dissatisfaction with PwC. BT has already announced that it will be hiring KPMG instead; PwC has held the account for 33 years.

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Speaking at the AGM, Sir Mike Rake, the outgoing chairman of BT, said that BT’s year was “overshadowed” by the fraud that went undetected in BT’s Italian arm. BT Italy had been inflating its profits over several years.

Meanwhile, UK regulators fined the telecoms company £42m after it “misused” contract terms to reduce the compensation owed to other firms for failing to deliver broadband services on time.

It was a mixed message for the board. A resounding 98 per cent of shareholders back BT’s chief executive Gavin Patterson, but Nick Rose, the senior independent director, was only approved by 88 per cent of investors.

Jan du Plessis, BT’s new chairman, who has joined from Rio Tinto, said in a short statement at the start of the meeting: “BT is not just a great company but I am acutely aware of its importance to our country.”

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