BT Group (LON:BT.A) is braced for a shareholder revolt over the choice of KPMG as its new auditor, The Times has reported. The former telecoms monopoly changed its auditor last year following the discovery of a £500 million fraud at the telecoms group’s Italian business.
BT’s share price has jumped in London this morning, having added 1.97 percent to 212.75p as of 08:36 BST. The group’s stock is outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.86 percent higher at 7,669.25 points. The group’s shares have lost a little over a quarter of their value over the past year, as compared with about a 2.6-percent gain in the Footsie.
BT braces for investor revolt
The Times reported this morning that BT was braced for a shareholder revolt over the choice of KPMG as its new auditor after damning reports about the Big Four accountancy firm. The telco named KPMG as its new auditor about a year ago, replacing PWC following the discovery of an accounting black hole at its Italian business.
The appointment of KPMG, however, has to be approved by BT shareholders at the group’s annual meeting on July 11 and insiders indicated to the newspaper that they feared that there could be a protest vote against the auditor’s appointment. Earlier this week, the Financial Reporting Council accused KPMG of an ‘unacceptable deterioration’ in the quality of its audits.
Analysts on BT
Deutsche Bank reaffirmed the telco as a ‘hold’ this month, while slashing its valuation on the stock from 248p to 235p. According to MarketBeat, the former telecoms monopoly currently has a consensus ‘hold’ rating and an average price target of 292.94p.