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Quinn prepares to mount shareholder claim against BT following accounting scandal

Quinn Emanuel Urquhart & Sullivan is investigating a potential class action against BT on behalf of its shareholders following an accounting scandal which saw almost £8bn, or more than a fifth, wiped off the telco’s stock value.

BT Group originally estimated a write-down of £145m last year citing ‘inappropriate management behaviour’ in its Italian business. The company later revised the figure to £530m in its third quarter results following an independent review by KPMG.

Quinn is speaking to its Volkswagen and RBS clients which are all major institutional investors and is looking to begin damages analysis.

It has not yet been decided whether it will be a funded case or whether Quinn will bring this as a Damages Based Agreement, where the shareholders will agree to pay the lawyer a percentage of sums recovered in a claim.

Quinn’s team on the case includes partners Ted Greeno, Richard East and Hamburg partner Nadine Herman. The team expects it will take around two to three months to put a claim together.

East (pictured) told Legal Business: ‘It’s very likely that a lot of our clients on the VW claim will have holdings in BT stock. These are large institutional investors and they will have an exposure to BT undoubtedly.’

Quinn is considering whether there is case under a section 90 of the Financial Services and Markets Act which provides for shareholder group actions or if there are other common law claims arising out of the accounting scandal.

Separately, litigation funder Bentham Europe also confirmed it opened talks with BT shareholders in October. However Bentham declined to comment on whether it had instructed legal counsel.

In 2015 Quinn was instructed by Bentham in a shareholder lawsuit against Volkswagen after the company lost as much as $33bn in market value in ten days after it admitted to cheating emissions tests. The US firm also teamed up with consumer rights firm Hagens Berman to file a class action complaint in Los Angeles.

Late last year claimants represented by Quinn settled their case in the long running £4bn shareholder group action against the Royal Bank of Scotland.