LONDON (AFX) - Arun Sarin, the newly appointed chief executive of Vodafone
PLC, faces a potentially damaging lawsuit in the US over allegations of
Enron-type accounting practices, according to the Observer.
The newspaper said a telecoms company once run by him has been accused of
overstating its revenues and issuing false predictions for its earnings
potential.
According to a class action filed in the US against Nasdaq-listed
infrastructure firm InfoSpace, which Sarin headed between April 2000 and January
2001, the company concealed its "true operating performance in order to
artificially inflate the market price of [its] securities".
The lawsuit, filed by New York-based Wolf, Haldenstein, Adler, Freeman &
Herz, the same firm which earlier this year filed a claim against Vodafone, said
that between January 2000 and January 2001 InfoSpace "disseminated false and
misleading information concerning [its] actual full year 1999 and 2000 financial
performance".
It also alleges that InfoSpace's accounts had not been prepared in
conformity to generally agreed accounting policies and that the firm had
understated the true size of its expenses.
A Vodafone spokesman said Sarin's background had been thoroughly vetted
before he was appointed.
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