Italian investigators have seized documents from the Milan offices of International Business Machines Corp (IBM) as part of an investigation into allegations of fraud at one of its customers, BT Italy, a unit of Britain’s BT Group PLC, sources said.
Dozens of tax police on Thursday raided the Italian offices of nine suppliers to BT Italy, including the US tech group, as well as BT Italy’s own headquarters, and took boxes of documents away, sources familiar with the probe said.
IBM was cooperating with authorities, company spokesman Alessandro Ferrari said.
The US group is not formally under investigation and none of its representatives has been accused of wrongdoing, but the warrant for Thursday’s seizures, seen by reporters, states that some transactions between BT Italy and its suppliers were faked.
The warrant authorized the search for evidence in relation to allegations that former BT Italy managers had conspired with suppliers and customers to fake orders, and to issue false credit notes to reduce BT Italy’s costs.
Investigators also sought evidence that BT Italy and suppliers contrived sale-and-leaseback transactions to artificially boost sales and profit margins.
The transactions involved several firms, including IBM, according to the warrant and the sources.
The accounting scandal surfaced in October last year when BT Group said it had discovered accounting errors at its Italy unit.
In January, it characterized it as improper accounting and took a write-down of about ￡530 million (US$690 million at the current exchange rate).
In March, it filed a criminal complaint with Italian prosecutors, accusing several former Italian executives and other employees of breaking company rules, and unlawful conduct.
“We’ve been proactively assisting prosecutors in Milan with their investigations into the inappropriate behavior that took place at BT Italy,” BT Group said in an e-mailed statement.
Milan prosecutors this week formally put under investigation five former executives and employees of BT Italy, on allegations that they ran a conspiracy to fake transactions to inflate BT Italy’s financial performance.
Sources said the motive was to ensure executives and staff met their bonus targets.
The five are former BT Italy chief executive Gianluca Cimini, former chief operating officer Stefania Truzzoli, former chief financial officer Luca Sebastiani, ex-employee Giacomo Ingannamorte and Sebastiani’s predecessor, Alessandro Clerici.
The other suppliers raided were T.A.I. Software Solution Srl, ITF Srl, Var Group Spa, NSR Srl, Servizi Tecnici per l’Elettronica Spa, Gomedia Srl, L.B. Srl and Shicon Europe Srl, according to the warrant.
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