Deutsche Telekom Chief Executive Timotheus Höttges has demanded a refund from BT Group for the stake it purchased in 2018. Höttges, who is one of Europe’s most powerful telecoms executives, has argued that BT misled investors about its financial health when it purchased a 12.1% stake in the British telco giant in 2018. He also claims that BT’s recent struggles have devalued Deutsche Telekom’s investment significantly. In this blog post, we will explore the full story behind this dispute between Deutsche Telekom and BT, looking at why Höttges is so dissatisfied with his investment and what this means for the future of both companies.

BT overcharged for stake investment, says Deutsche Telekom chief

The chief executive of Deutsche Telekom, Timotheus Hoettges, has demanded a refund from BT for its shareholding investment, claiming that the UK telecoms group overcharged for the stake.

Speaking at an event in Berlin, Hoettges said that his company had been “naive” when it bought a 12% stake in BT for £6.5bn (€7.4bn) in 2015. He added that he would be seeking talks with BT’s new chief executive, Philip Jansen, to discuss the matter.

Deutsche Telekom’s investment in BT was seen as a way to strengthen the German company’s position in the UK market. However, Hoettges now believes that the purchase was “too expensive”.

BT acquired a controlling interest in Deutsche Telekom’s UK mobile operator EE in 2016 for £12.5bn. The deal gave BT a valuable portfolio of mobile spectrum and access to EE’s extensive 4G network.

What this means for the future of BT

Deutsche Telekom is demanding a refund for its investment in BT, which it acquired in 2015. This move signals a major shift in the telecom landscape and could have far-reaching implications for the future of BT.

Deutsche Telekom’s demand for a refund indicates that it no longer believes that BT is a sound investment. This could lead other investors to reconsider their own positions in BT, and it could put pressure on the company to make changes in order to regain investor confidence.

The future of BT is uncertain at this time, but this development is definitely something to watch closely.

How this affects shareholders

The Chief Executive of Deutsche Telekom has demanded a refund for the company’s stake investment in BT, claiming that the UK telecoms group had misled shareholders about its financial health.

Deutsche Telekom acquired a 12% stake in BT in 2016 as part of a deal to merge the two companies’ mobile businesses in the UK. But since then, BT’s share price has plunged and it has been hit by a string of accounting scandals.

In an interview with German newspaper Bild am Sonntag, Timotheus Hoettges said that Deutsche Telekom had been “deceived” by BT and called for a “fair solution” for shareholders. He did not say how much money he was seeking from BT.

Hoettges’ comments come just weeks after another major shareholder in BT, Australian investment fund HESTA, wrote to the company demanding answers about its accounting problems.

BT has admitted that it overstated its profits by around £530 million over several years, due to accounting errors at its Italian business. It also faces an investigation by the UK’s Serious Fraud Office over alleged improper payments made to win contracts in Africa.

The scandal has wiped billions of pounds off BT’s market value and left its reputation in tatters. The company is now facing calls from investors to break itself up and sell off its struggling global business.

The reaction from the UK government

The UK government has not yet responded to Deutsche Telekom’s demand for a refund on its investment in BT. However, given the recent public outcry over the high cost of broadband in the UK, the government is likely to be under pressure to act on this issue.

Deutsche Telekom acquired a 12% stake in BT in 2001, and has since seen the value of its investment decline sharply. In October 2016, Deutsche Telekom’s CEO, Timotheus Hoettges, wrote to the UK Chancellor of the Exchequer, Philip Hammond, demanding a refund on the grounds that BT had failed to deliver on its promises to invest in broadband infrastructure.

Hoettges argued that Deutsche Telekom had been “misled” by BT and that the UK government was ultimately responsible for ensuring that BT delivered on its commitments. He also warned that unless action was taken, Deutsche Telekom would be forced to write down the value of its investment.

The letter sparked a heated debate in the UK Parliament, with some MPs arguing that Hoettges was simply trying to pressure the government into providing more financial support for BT. Others said that his demands were justified and accused BT of “fleecing” customers with high prices and poor service.

So far, the government has not responded publicly to Hoettges’ letter. However, it is expected to come under increasing pressure to do so as discontent over broadband prices continues to grow.

What this means for the UK telecoms industry

The UK telecoms industry is in a state of flux following the decision by Deutsche Telekom to demand a refund for its stake investment in BT. The German company is the majority shareholder in BT, and its demand for a refund highlights the deep divisions within the UK telecoms sector.

Deutsche Telekom’s demand comes as BT prepares to spin off its Openreach network division into a separate, legally independent company. This move has been widely criticised by rivals such as Vodafone and Sky, who argue that it does not go far enough in ensuring competition within the UK telecoms market.

Deutsche Telekom’s demand for a refund appears to be based on the belief that BT’s Openreach spin-off does not go far enough in addressing competition concerns. If Deutsche Telekom were to succeed in getting a refund for its investment, it would likely have a significant impact on the UK telecoms industry.

Conclusion

The Deutsche Telekom Chief’s demand for a refund of the stake investment in BT is an important step for the company and could pave the way to better financial outcomes. The chief has argued that BT’s share price does not reflect its true value and that their investments were overpriced. It remains to be seen whether or not this legal action will result in a favorable outcome, but it’s clear that Deutsche Telekom wants to recoup some of its losses from investing in BT. This could set a precedent for other corporations looking to invest or divest from tech stocks, signaling caution on how these investments should be made.