Sept. 3 - Vodafone's CEO says he's committed to the mobile operator's next chapter after pulling off the $130 billion sale of the group's stake in U.S. operator Verizon Wireless. But as Joanna Partridge reports there's anger that the British firm won't pay any tax in the UK on the deal, because it will take place through a Dutch holding company.
Vodafone's mega $130 billion deal with Verizon brings a windfall for investors, like Stan Grierson. SOUNDBITE: Stan Grierson, Vodafone shareholder, saying (English): "I feel positive about this deal. Some of my shares are now at eight times what I paid for them." But the initial investor euphoria quickly subsided. Vodafone stock fell by around 4.5% on Tuesday, despite the amount earmarked for shareholders by the firm's CEO Vittorio Colao. SOUNDBITE: Vittorio Colao, Vodafone CEO, saying (English): "We are distributing £54 billion to our shareholders who have trusted the investment strategy of the company. The company itself will be strengthened, the strategy will be more robust." The third biggest deal in history is likely to be a defining event in Colao's career and that of the Verizon CEO Lowell McAdam. But Colao hopes it'll be remembered for all the right reasons. There's growing anger in Britain that the Treasury won't benefit. The transaction will take place through a Dutch holding company, bypassing the British tax man. Colao defended this detail, saying even if the deal took place in the UK, it wouldn't be taxable. SOUNDBITE: Vittorio Colao, Vodafone CEO, saying (English): "The UK has got for many years a tax exemption on this type of transaction. This transaction actually happens in the Netherlands which has the same rules as the UK. Vodafone has to play by the rules, and the standard rules and laws of each country where we operate." Vodafone's come under fire before for its tax arrangements. In June it revealed it hadn't paid any corporation tax in Britain - for the second year. It blamed tough operating conditions in the UK and denied shifting income abroad. But Vodafone did file strong profits at its subsidaries in Luxembourg And this latest deal will only increase campaigners' calls for Treasury ministers to examine whether firms are exploiting tax loopholes.