Investor tries to oust Vodafone chairman

Click to follow
The Independent Online

Vodafone can expect turbulence at its annual meeting next week after a prominent shareholder yesterday moved to oust Sir John Bond following years of "strategic weaknesses" at the group.

The Ontario Teachers' Pension Plan (OTPP), which holds a 0.42 per cent stake in the mobile phone giant, said it would vote against the re-election of Sir John Bond, who has been chairman since 2006, at the annual general meeting on Tuesday.

The giant investor, which closed its deal to buy the National Lottery operator Camelot earlier this month, said rejuvenating the board was a "critical step" that would spark a corporate restructuring "and a re-examination of Vodafone's long history of poor capital allocation and disastrous M&A".

Its proposal said: "For at least the last five years, the company has had significant structural and strategic weaknesses, resulting in Vodafone trading at a substantial, persistent discount to its asset value."

OTPP also said it would vote against the re-election of deputy chairman John Buchanan as part of its move to overhaul the board.

Vodafone insiders said this was the first time OTPP had turned on management and described it as an exercise in "running the flag up the flagpole". One conceded that other shareholders could support the move to oust Sir John "if they see some short-term value in the move".

The Canadian fund does support the chief executive Vittorio Colao, who has been in charge of Vodafone since 2008, and has successfully slashed costs at the group.

"We believe the chief executive has begun improving Vodafone's operating performance and competitiveness," it said, although it cautioned: "We remain particularly concerned with the lengthy delay in addressing fundamental issues."

Vodafone is preparing to announce its interim management statement covering the quarter to the end of June on Friday.