Telecoms giant BT has announced this morning that Sir Michael Rake, currently chairman of accountancy group KPMG, will become its new chairman, succeeding Sir Christopher Bland.
Bland, who is due to step down from the role in September, has been chairman of BT for six years, having previously been chairman of the BBC board of governors.
"I am thrilled to be joining a company which has achieved so much in recent years and has such ambition for the future. Sir Christopher Bland has done a magnificent job setting BT on a secure financial footing and developing a strategy for the future. Ben Verwaayen leads an outstanding team. I look forward to working closely with him, the board and my new colleagues" said Rake in a statement.
Rake's time as chairman of KPMG has had its fair share of problems. During his time, the company was accused of fraud by the US Department of Justice. KPMG subsequently admitted creating illegal tax shelters to aid its clients in evading billions of dollars in taxation, and as a result paid $456m (234m) in fines. However, while the company itself was criticised in the investigation, Rake himself was not named in the Department of Justice indictment.
It is believed that Rake will take a significant pay cut by joining BT. At KPMG he earned 4.2m including bonuses last year. He will be on a 12 month rolling contract, suggesting BT are being cautious in their new appointment.
Bland was one of a group of executives brought into the company towards the end of the dot com period charged with restructuring the forms shattered finances and controlling spiralling debt, something which was tacked swiftly by drastic cost cutting, its withdrawal from the high street, the end of its Concert joint venture with AT&T and the sell off of its mobile phone network BT Cellnet, now known as O2.
"Bland played a major role in some important decisions that really rescued BT, the selling off of subsidiaries and reducing debt," said Tom Gidley Kitchen, an analyst at stockbroker Charles Stanley & Company. "It was in major trouble when he arrived and is a different business now."
The company has also recommenced expansion outside of the UK and Europe, re-entering the US with an aggressive marketing blitz aimed at wooing business customers.
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