Report uncovers emails that contradict UK incumbent’s claim it didn’t know anything dodgy was going on

Fresh evidence that senior BT executives in the UK knew of, and were complicit in, fraudulent accounting at the telco’s Italian unit emerged on Tuesday.

The damning police report, seen by Reuters, claims to have uncovered emails from head office asking managers in Italy to use "aggressive, anomalous and knowingly wrong accounting practices" to falsely boost the unit’s financial performance.

BT first disclosed the Italian accounting scandal in October 2016. In January 2017, it admitted the scandal was much worse than first thought, which led to a £530 million writedown in the value of BT Italy.

Almost two years ago to the day, BT filed charges against former staff of the unit, claiming that it was the victim of any fraud that took place.

Tuesday’s report seems to contradict that claim.

According to the police investigation, Brian More O’Ferrall emailed colleagues in Italy asking them to adjust their accounts to boost profits. At the time, he served as CFO of BT Europe, a division of Global Services. He currently serves as finance director of BT Wholesale.

An unnamed source cited by Reuters said O’Ferrall is not under investigation because he was not on BT Italy’s board and did not sign off on the unit’s accounts during the years the fraud took place.

In February, Italian prosecutors claimed that Luis Alvarez and Richard Cameron, ex-CEO and ex-CFO respectively of Global Services, and former president of BT Continental Europe Corrado Sciolla, set unrealistically high business targets and were complicit in false accounting at BT Italy. Alvarez and Cameron were based in London at the time, while Sciolla was based in Milan.