Vodafone hit by €250m lawsuit in Greece

Vodafone has been served with a €250m lawsuit for allegedly breaching its contracts and causing harm to a Greek retail partner.

The British telecoms group's Greek subsidiary last week received the details of the civil lawsuit from MTS, a local telecoms retailer that sold Vodafone contracts and services in the country. Vodafone, which is the second largest mobile group in Greece, was also served with the documents in London.

The claims, seen by the Financial Times, against Vodafone's Greek subsidiary focus on an alleged attempt to reduce the value of MTS, in which the British group owned a 40 per cent stake.

MTS became a franchise operator for Vodafone in its retail stores in Athens and the north of the country. The company, which is managed by Athanasios Papistas, a local businessman, ran 67 Vodafone-branded stores in the country up to 2011 as part of an 11-year relationship with the British group.

MTS claims that Vodafone restricted its ability to operate through the cancellation of a loan restructuring and the termination of a co-operation agreement involving maintenance services and loan contracts. MTS also alleges that Vodafone exploited its economic dependence on the British group.

The company, which was established as a telecoms retailer in northern Greece before the franchise agreement struck with Vodafone in 2000, claims that it was also prevented from listing on the Athens stock exchange.

Vodafone said: "Mr and Mrs Papistas and the Papistas Group companies in Greece have made legal claims against Vodafone Greece following Vodafone's termination of a longstanding commercial relationship.

"The claims are without merit and the purported losses completely fanciful. Vodafone will be defending them vigorously."

MTS alleges that the ultimate purpose of Vodafone was to obtain the assets of the business at a low value and exclude a local wholesaler and retailer.

The harm from the loss of assets is estimated at €205.5m for the business, according to the claim. There is an additional personal claim of €50m for the owners of MTS, Mr Papistas and Loukia Florou, in compensation for the enforcement action against the pair by Greek banks.

Mr Papistas also claims that Vodafone prevented him from selling his 60 per cent stake in the business to a third party. The claim has been filed to a Greek court of first instance. The court hearing has been set for April 2016.

MTS said that it operated franchise outlets reflecting about a fifth of the retail-store portfolio of Vodafone and employing 250 people. MTS is not in administration but now employs two people.

MTS was one of Greece's larger retail operators for mobile phones in the country before the Vodafone agreement, which began in 2000. MTS said that it put on hold development of its own stores to expand the Vodafone franchise.

© The Financial Times Limited 2013. All rights reserved.
FT and Financial Times are trademarks of the Financial Times Ltd.
Not to be redistributed, copied or modified in any way.
Euro2day.gr is solely responsible for providing this translation and the Financial Times Limited does not accept any liability for the accuracy or quality of the translation