BT Group faces U.S. lawsuits as Italian accounting scandal deepens

1 Legal

1 Legal is a Division of 1 Media

1 Legal - 1 Lawyers - 1 Attorneys

 
Need Legal Clients  - Need a Lawyer
 
 

By Jonathan Stempel | NEW YORK

NEW YORK BT Group Plc was hit on
Wednesday with at least two shareholder lawsuits in the United
States, after one-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 U.S. District
Courts in Manhattan and in nearby Newark, New Jersey, on behalf
of BT investors over the last few years.

Both lawsuits were brought by individuals seeking
class-action status, and also name 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 on
Tuesday.

This came after BT boosted an expected writedown tied to its
Italian division to 530 million pounds (US$669 million) from 145
million pounds (US$183 million), with Patterson expressing
disappointment with the “inappropriate behavior” uncovered.

BT on Tuesday also 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.

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.

Both lawsuits seek unspecified damages.

The New York case was brought on behalf of investors in
ADRs, while the New Jersey case also covers other securities.

It has become harder to pursue U.S. securities fraud
lawsuits targeting non-U.S. companies over securities issued
outside the country, since the U.S. Supreme Court in 2010
narrowed the reach of U.S. securities laws.

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

The cases are Sarraf v BT Group Plc et al, U.S. District
Court, Southern District of New York, No. 17-00558; and
Christian v. BT Group Plc et al, U.S. District Court, District
of New Jersey, No. 17-00497. ($1 = 0.7921 pounds)



1 Lawyers
1 Lawyers

1 Legal

#1 Lawyers Search Engine

1 Legal is part of the 1 Search Project

Practice Areas - News - Federal - State - Contact Us


1 Legal

1 Legal is a Division of 1 Media

1 Legal - 1 Lawyers - 1 Attorneys

 
Need Legal Clients  - Need a Lawyer