The U.K. based international company “Vodafone” has been sued by a company’s former partner in Greece, who is claiming around €1.3 billion (£1.1 billion) in damages from the telecoms giant for the economic collapse of his company after Vodafone pulled out of a retail franchise deal with him.
According to reports by the British newspaper “The Telegraph,” Athanasios Papistas accused the British mobile group of sabotaging his business empire.
At more than three times the size of the previous writs put together, the most recent and largest claim for £900 million alleges that the collapse of Papistas’ retail franchise called “MTS” caused a “severe liquidity problem” for the Papistas Group, which also included his property interests formed along with a property management company jointly owned with the Greek scandal-hit Vatopedi Monastery.
The international company’s local branch Vodafone Greece went into business with Papistas’ MTS in 2000 employing several staff in dozens of Vodafone-branded mobile phone shops all over Greece.
Today, however, MTS consists only of Papistas and his wife due to the withdrawal of Vodafone Greece from the partnership, after the retailer failed to meet sales targets.
According to the writ submitted by MTS, the split was actually the result of a change in Vodafone’s retail strategy in 2008 in favor of direct sales. It is claimed that Vodafone, which held 40 percent of the franchise, used its financial power to undermine its local partner, blocked a loan restructuring and cancelled cooperation on maintenance agreements.
“The claims are without merit and the purported losses completely fanciful. Vodafone will be defending them vigorously,” a Vodafone spokesman said.
Vodafone Greece has been a drag on the group’s financial performance in recent years. In late 2011, it wrote off €550 million from the value of its Greek business.