Spain’s largest cable operator ONO to be investigated following accusations of ‘massive fraud’

LAST UPDATED: 2 Oct, 2014 @ 11:08
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Spain’s largest cable operator ONO to be investigated following accusations of ‘massive fraud’

VODAFONE has launched an investigation into its recently-acquired Spanish company ONO, following accusations of ‘massive fraud’ from the Hacienda.

An ongoing tax investigation into ONO – Spain’s largest cable operator – discovered that €60 million of IVA was not declared by one of the company’s purchase and sales departments.

ONO was allegedly informed of the proceedings by the Hacienda while negotiating the sale with Vodafone but failed to notify them.

It is also alleged that ONO inflated its operating profits to boost the firm’s valuation, making it more attractive to shareholders.

The alleged fraud is based on the international sale of call traffic through a web of companies outside the company’s balance sheet.

Vodafone – which paid €7.2 billion for ONO in March – has now hired teams from Deloitte and DLA Piper to conduct an independent investigation.

Bonus payments of €68 million to be paid to ONO chairman Jose Maria Castellano, CEO Rosalia Portela and financial director Carlos Sagasta as part of the takeover have been blocked until the findings are revealed.

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