BT has lost a fifth of its value in one day after shares plummeted following a profit warning issued in light of an accounting scandal in its Italian division.
The news saw shares plunge by 19% in Tuesday morning trading, wiping more than £5b billion off its market value.
Accounting irregularities resulted in an overstatement of earnings at the division over a number of years.
The company will take a £530 million financial hit following the scandal.
An investigation revealed improper accounting practices and a "complex set of improper sales, purchase, factoring and leasing transactions", BT said.
BT chief executive Gavin Patterson said: "We are deeply disappointed with the improper practices which we have found in our Italian business.
"We have undertaken extensive investigations into that business and are committed to ensuring the highest standards across the whole of BT for the benefit of our customers, shareholders, employees and all other stakeholders."
When did this all start and what does the future hold?
- The group first revealed the accounting errors in October last year.
- On Tuesday, the firm said the investigation is "substantially complete".
- It is now attempting to establish how the £530 million hit should be reflected in its financial statements for current and previous periods.
- The firm expects the fiasco to result in a reduction in its third-quarter adjusted revenue and adjusted earnings of around £120 million.
- For the financial year as a whole, BT expects adjusted revenue to decrease by around £200 million and adjusted earnings by £175 million.
- It expects to take a similar hit next year.
To compound matters, BT also warned that the outlook for UK public sector and international corporate markets has "deteriorated".
For its business and public sector divisions, it is pencilling in a double-digit year-on-year percentage decline in fourth-quarter underlying earnings.
The group said in a statement:
The Italian business accounts for around 1% of its total earnings.
The company will issue a third-quarter trading update on Friday.