BT’s profits slumped more than 40 per cent in the first quarter of its new financial year after it was forced to pay out £225m to two shareholders following the accounting scandal at its Italian operation, The Guardian reports.
Deutsche Telekom and Orange became shareholders in BT after the company struck a £12.5bn cash and shares deal to buy mobile company EE in 2015.
As part of that deal the two companies were issued a warranty as a protection against a slump in BT’s performance.
DT and Orange triggered a claim under the warranty after BT’s stock market value plunged by almost £8bn, after the company revealed the extent of a £530m accounting scandal at its Italian operation. BT’s share price remains more than 20 per cent lower that it was a year ago.
BT said the £225m payout represents a “full and final settlement in respect of these issues”.
The charge hurt BT’s financial performance badly, with pre-tax profits slumping 42 per cent from £717m to £418m in the three months to the end of June.
