Americans put Vodafone's Sarin back in hot water

MORE TROUBLE for Vodafone's Arun Sarin as a US investor group, Glass Lewis, backed proposals to spin off Vodafone's holding in the USA's Verizon Wireless.

Efficient Capital Structures (ECS) has called on Vodafone to return £38 billion to shareholders which is tied up in the company's 45 per cent holding in Verizon Wireless.

ECS's most prominent supporter is John Mayo - a man who is widely viewed as behind the demise of Marconi. Until Glass Lewis came along, ECS was struggling to get support from UK institutions.

It's estimated that about one third of Vodafone's shareholders are American institutions. Until now the proposed spin off looked dead in the water.

The Sunday Times reports Vodafone answer to ECS's proposals as warning "they would create significant additional risk, constrain future flexibility and erode the group's ability to generate value for its shareholders in the future".

The trouble is that ECS has calculated that Verizon accounted for 62 per cent of the increase in Vodafone's growth in earnings per share over the past three years.

ECS will need support from over 50 per cent of shareholders to get anywhere with its proposals at Vodafone's annual meeting on July 24th.

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