Vodafone Starts Audit Into Possible Tax Fraud at Ono Unit
Vodafone Group Plc (VOD) said it has begun an audit into possible tax fraud at Grupo Corporativo Ono SA, the Spanish cable operator Vodafone bought in July.
“As soon as Vodafone became aware of the issue we instigated a forensic audit to investigate the facts relating to the alleged fraud,” Ben Padovan, a spokesman for Newbury, England-based Vodafone, wrote yesterday in an e-mail.
The probe has to do with value-added tax declarations that Ono made, Vodafone said. Vodafone, the biggest mobile-phone carrier outside of Asia, agreed to buy Ono in March for 7.2 billion euros ($9.1 billion) including debt as part of a plan to add Internet and TV services across Europe.
The purchase of Ono was intended to help Vodafone turn around its struggling Spanish business, which has been chipped away by price wars and a sluggish economy causing revenue declines for the last four fiscal years. Service revenue fell 13.4 percent in Spain in the year ended in March.
The company is spending 19 billion pounds in a network improvement program through March 2016, putting funds into faster mobile and broadband networks and expanding into more services. Vodafone also agreed to buy Kabel Deutschland Holding AG for 10.5 billion euros last year to bulk up its network in Germany.
Vodafone will withhold bonuses for three Ono managers tied to the acquisition, according to a report in online publication El Confidencial. El Pais reported the investigation on Oct. 25.
Source: bloomberg- Vodafone Starts Audit Into Possible Tax Fraud at Ono Unit
