News
Conservative MP John Hayes has asked Business Secretary Jonathan Reynolds to refer the enquiry to the newly appointed Covid corruption commissioner
Back in December, a group of franchisee’s running Vodafone’s high street shops in the UK filed a court case against the operator, claiming the company had “unjustly enriched” itself at their expense.
The case itself primarily revolves around cuts to commission Vodafone introduced in 2020, during the height of the coronavirus crisis. At this time, with the high streets largely deserted, many of the franchisees applied for support in the form of governmental financial assistance to keep their businesses afloat. The claimants allege that Vodafone used its knowledge of this financial support to subsequently slash commission rates paid to franchisees – in effect, absorbing the benefits of the government relief funding.
The claimants also say they were also forced by Vodafone to pay large fines for minor administrative errors.
Many franchisees say these actions pushed their businesses into the red, often forcing them to take out further loans to stay afloat.
In total, 61 of Vodafone’s roughly 150 franchise operators are part of the lawsuit, which is seeking over £120 million in compensation.
In a letter this week, Conservative MP John Hayes has asked Business Secretary Jonathan Reynolds to refer Vodafone and the case to Tom Hayhoe, the newly appointed Covid corruption commissioner.
In this novel position, Hayhoe has the power to investigate misuses of public funds during the pandemic. This will primarily focus on the fraudulent procurement of PPE (Personal Protective Equipment), but also includes scope for investigating cases related to business grants and other government support schemes.
Vodafone says that it “strongly refutes” claims that the company “unjustly enriched” by exploiting government funding.
In a statement to The Guardian, the operator said that its internal investigations into the matter had “concluded that some actions between Vodafone and franchise partners had not always adhered to the standards we expect, however no evidence of misconduct was found”.
The Business Secretary has yet to deliver an official response.
Keep up to date with all the latest telecoms news from around the world with the Total Telecom newsletter
Also in the news:
VEON and Starlink to launch Direct-to-Cell Satellite connectivity in Ukraine
Swisscom completes acquisition of Vodafone Italia
Equinix to buy BT’s Irish data centre business for €59m