Vodafone faces backlash over shares deadline

Investors frustrated in efforts to claim portion of $80bn windfall from telco

Vodafone sold stake in US business for $130bn. Photograph: Rui Vieira/PA

Vodafone sold stake in US business for $130bn. Photograph: Rui Vieira/PA

Fri, Feb 28, 2014, 22:19


Vodafone is facing a backlash from shareholders obliged to deal with tax bills on a cash “windfall” from the company.

A large number of investors say they have been frustrated in their efforts to claim their share of an $80 billion “return of value” from Vodafone and its share registrar, Computershare.

Following the sale of its stake in the US-based business for $130 billion, the telecoms group has been returning more than €600 million to Irish shareholders from their investment in the company in a mix of cash and shares in rival US telco, Verizon. It is also offering to sell those US shares for customers not interested in them.


Telecom Éireann flotation
Shareholders were offered the choice of receiving this “return of value” either as a special dividend subject to income tax or as capital. As most Irish shareholders’ holdings date back to the Telecom Éireann flotation, on which they are still losing money, this second option would involve no tax bill.

Shareholders who contacted The Irish Times yesterday said they had received letters from Computershare stating that their forms had arrived back in its Bristol office after the January 20th, 1pm deadline and that they would therefore be treated as selecting the default “income” option.

In at least one case, the shareholder had posted the form choosing how to receive their payment on February 3rd. Many others had posted their forms 10 days or more before the deadline. The letters from Computershare announcing that people had missed the deadline were dated February 25th and arrived with many on Thursday morning, less than 48 hours later.

Computershare had already been involved in controversy in the run-up to the deadline. It refused to post forms to Irish investors ahead of the deadline despite assurances from Vodafone that it was still possible to receive forms.

A significant number of those who eventually were sent forms after a U-turn by the registrar following the intervention of Vodafone did not end up receiving the forms before the deadline for their return six days later. One shareholder said he had still to receive the form, and others spoke of month-long delays getting forms reissued after the December mailings.

Computershare said that all queries regarding late arrival of forms should be directed at An Post and the Royal Mail. However, checks with both indicate that mail between Ireland and the UK should take no more than three to five days to arrive.

The spokeswoman for Computershare said subsequently that it opened all letters on arrival to its office and scanned and dated the contents.

“We appreciate how important the return of value is and there is no way that post is . . . not opened,” said the spokeswoman.

Earlier, Vodafone said all queries from disgruntled shareholders would have to be directed to Computershare.

Computershare has a complaints procedure and it is open to dissatisfied people to appeal further to the British Financial Ombudsman Service.