BT Italy false accounting trial starts in Milan

MILAN, Jan 26 (Reuters) - A trial into alleged false accounting at the Italian unit of British Telecom in 2015 and 2016 opened in Milan on Tuesday, with 20 defendants, including two former senior BT executives and the Italian subsidiary itself, facing charges.

Milan prosecutors allege that a network of BT Italy employees inflated revenues, faked contract renewals and invoices and invented bogus supplier transactions in order to disguise the unit’s true financial performance.

BT took a 530 million pound ($725 million) charge in its accounts in 2017 relating to the alleged false accounting.

All the defendants have always denied any wrongdoing.

The case will be heard in a high-security courtroom on the outskirts of Italy’s financial capital, usually chosen for Mafia trials but now to comply with coronavirus restrictions.

Under Italian law, a company can also be prosecuted for offences committed by its managers in its own interest.

In a written response to Reuters when a judge sent the defendants to trial in November, BT said it was disappointed but confident in its defence.

The first hearing of such trials is mainly procedural, with a possible decision on whether to admit as civil parties those who believe they have been harmed, including U.S. pension fund, Pension Reserve Investment Management.

Among the defendants are Richard Cameron, former chief financial officer of BT Global Services, and Corrado Sciolla, formerly BT’s head of continental Europe.

Both have denied any wrongdoing. (Reporting by Emilio Parodi; Editing by Keith Weir and Alexander Smith)