Former Vodafone chief severs ties

By Reuters

Published: March 12, 2006, 4:50 PM PST

TalkBack

E-mail

Former Vodafone chief Chris Gent severed his links with the company on Sunday, as Chairman Ian MacLaurin broke his silence to declare support for CEO Arun Sarin to quell talk of a boardroom rift at the cell phone giant.

Gent, widely credited with transforming Vodafone from a small British company into a global giant, said he had quit his position as life president and denied he had used his honorary post to "obstruct current management."

"If there is a whispering campaign or conspiracy, which I very much doubt, then I am not party to it," Gent said, as the world's top mobile operator by sales was engulfed by more reports over the weekend of a bitter battle between warring camps.

Vodafone, one of Britain's most admired companies, has for the past week been dogged by reports of a split at its top and the presence of opposing camps of directors--the old guard comprising MacLaurin and Gent and the new guard led by Sarin.

Gent, who was reported by papers to have considered voting against Sarin's re-election last year, said he had never spoken communicated on issues concerning Vodafone with either the media or shareholders since retiring in July 2003.

"When I was an executive ... relationships within the company and at board level where characterized by openness and trust. We were mercifully free of company politics and blame culture," said Gent, who engineered Vodafone's 178 billion euro ($212 billion) historic purchase of Germany's Mannesmann in 2000.

Vodafone declined to comment on Gent's statement, which conspicuously contained no mention of Sarin.

Meanwhile, Sarin, under whose watch Vodafone's revenue growth has started to slow leading to growing investor disquiet over its strategy, appeared to have strengthened his position after receiving a public backing from MacLaurin.

"On my return from a business trip to South Africa, I have read the recent press comment about Vodafone with great concern. I want to make it clear that I and the board are totally supportive of ... Arun Sarin, as he takes the company forward in changing and challenging times," MacLaurin said. "Any other suggestion is completely untrue."

MacLaurin's intervention came as the Observer newspaper, citing sources close to the company, reported that MacLaurin tried to oust Sarin at a recent board meeting in Madrid.

A Vodafone spokesman denied another report that MacLaurin was due to meet worried investors on Monday, but did not say if any meetings were planned for later in the week.

Company purge
Gent's exit from the company will be viewed as a victory for the India-born Sarin, who, analysts and industry watchers say, is purging the group of the so-called old guard.

Last week, Vodafone axed its marketing chief Peter Bamford, who was considered to be close to Gent. Another old timer, Deputy Chief Executive Julian Horn-Smith, is stepping down in July. MacLaurin is also stepping down in July and will be replaced by HSBC Chairman John Bond.

The upheaval at Vodafone comes at a time the company is under pressure to reconsider its strategy of being a global player and sell some assets to return cash to investors.

The Business newspaper reported on Sunday that U.S. telecom giant Verizon Communications has made an informal approach to Vodafone about buying the latter's 45 percent stake in their Verizon Wireless joint venture for about $40 billion.

"We have made our interest in acquiring Vodafone's stake in Verizon Wireless clear," a Verizon source told the paper. "The ball is now in Vodafone's court."

Verizon is under pressure to consolidate control of Verizon Wireless in the wake of AT&T's planned acquisition of BellSouth, which will give AT&T complete control of top U.S. wireless company Cingular Wireless.

In other news:

Verizon was not immediately available and Vodafone declined to comment on the matter.

Vodafone is already in talks to sell a controlling stake in its struggling Japanese unit to Softbank.

The Financial Mail on Sunday reported that venture capital groups were discussing an "audacious" 100 billion pound ($173.9 billion) takeover of Vodafone, citing "senior City sources."

"No one's committed and they are not sure there's a way of doing it, but they are convinced of the potential value in a deal," one source told the paper.