Pension Fund Gets New Chance to Sue Vodafone

A lawsuit against Vodafone by the pension fund managed by the UK based Lothian Pension Fund has been re-opened after the US judge hearing the case decided that previous jurisdiction issues had been overcome. The pension fund had tried to claim that Vodafone misrepresented its financials following the takeover of Germany's Mannesmann, leading to losses for the fund.

Last November, Judge P. Kevin Castel of the District Court for the Southern District of New York dismissed a lawsuit by the pension fund after ruling that it did not have jurisdiction over the UK based company. In dismissing the case, Judge Castel had stated that Vodafone's actions in the USA had been "merely preparatory to any purported acts of securities fraud, and insufficient to establish subject matter jurisdiction over Lothian's claims."

The pension fund is claiming that Vodafone willfully misrepresenting the valuation of its subsidiaries in Japan and Italy. It is also claiming that cost savings programs were not delivering as expected and that the integration of the newly acquired German assets was too slow. The pension fund claims that Vodafone deliberately hid these alleged problems.

However, the case has been re-opened after admitting that the court had overlooked a US pension fund's status as a plaintiff in a possible class-action lawsuit. The US based Sterling Heights Police and Fire Retirement System had been added to the lawsuit just before the case was originally dismissed.

The Lothian pension fund, which is also in the midst of suing several other blue-chip companies, is claiming losses of US$2.9 million from what it says is Vodafone's "fraud".

Posted to the site on 15th April 2009