Vodafone has launched a probe to investigate an allegation of fraud at Ono, the Spanish cable company which the mobile phone giant took over in July this year.
The allegation relates to a possible tax fraud in part of Ono’s business, which could have over-inflated the company’s profits ahead of the takeover deal, which was worth £6bn.
Vodafone is understood to have blocked all payouts to Ono staff while the allegations are investigated by authorities in Spain. The reports point towards a small group of staff who supposedly traded international minutes via affiliate companies and avoided VAT payments in the process.
A Vodafone spokesman confirmed that the group was looking into reports of tax fraud last night and added: “As soon as Vodafone became aware of the issue we instigated a forensic audit to investigate the facts relating to the alleged fraud. As this matter remains under investigation, we cannot comment further.”
Former chairman of Ono Jose Maria Castellano, chief executive Rosalia Portela and chief financial officer Carlos Sagasta are no longer involved with the business. They had been in line to take away a share of £50m in bonuses following the successful takeover bid in July, payments, which have now been blocked.
The fraud allegedly took place before Vodafone took over the company, but investigators will want to know why the transaction did not get flagged during the due diligence process as part of the takeover. Investigators in Spain are said to have informed Ono executives of the probe in June, before the deal was done.