BT losing a pizza the action after Italian accounting scandal

banner_pizza_The BT Group is facing two shareholder lawsuits in the United States, after a fifth of the telecommunications company’s market value was wiped out in a single day amid a growing accounting scandal in Italy.

The lawsuits accusing the British company and three top executives of securities fraud were filed in the US District Courts in Manhattan and in nearby Newark, New Jersey.

Both lawsuits were brought by individuals seeking class-action status, and named Chief Executive Gavin Patterson, his predecessor Ian Livingston, and Finance Director Tony Chanmugam as defendants.

A spokeswoman for BT declined to comment on behalf of the defendants. BT had launched an internal probe into its Italian business after a whistleblower flagged concerns.

The price of BT’s shares in London and American depositary receipts in New York fell nearly 21 percent.

BT wrote-down its Italian division to £530 million from £145 million after Patterson expressed disappointment with the “inappropriate behaviour” uncovered.

BT reported slowing demand from government and corporate customers following last June’s vote by Britons to leave the European Union. It said that slowdown, together with the accounting problems, would weigh on results for two years.

But the lawsuits accuse BT of having concealed or made misleading statements about the accounting practices in Italy, causing it to inflate earnings and its stock price.

Companies are frequently sued in the United States after releasing negative news that investors say they did not expect.

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