Vodafone 2004 Annual Report Download - page 24

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Vodafone Group Plc Annual Report 2004
22
Legal Proceedings
Save as disclosed below, the Company and its subsidiaries are not involved in any
legal or arbitration proceedings (including any governmental proceedings which are
pending or known to be contemplated) which are expected to have, or have had in the
twelve months preceding the date of this report, a significant effect on the financial
position or profitability of the Company and its subsidiaries.
The Company is a defendant in four actions in the United States alleging personal
injury, including brain cancer, from mobile phone use. In each case, various other
carriers and mobile phone manufacturers are also named as defendants. These
actions are at an early stage and no accurate quantification on any losses which may
arise out of the claims can therefore be made as at the date of this report. The
Company is not aware that the health risk alleged in such personal injury claims have
been substantiated and will be vigorously defending such claims.
Between 18 September and 29 November 2002, nine complaints were filed in the
United States District Court for the Southern District of New York against the Company
and Lord MacLaurin, the Chairman of the Company and Sir Christopher Gent, Julian
Horn-Smith and Ken Hydon, executive officers of the Company. The Court
subsequently consolidated these actions and designated lead plaintiffs and lead
plaintiffs’ counsel. The plaintiffs filed a consolidated class action complaint on
6 June 2003 which alleged, among other things, that certain public statements made
by or attributed to the defendants and the timing of the Company’s decision to write
down the value of goodwill and certain impaired assets in the financial year ended
31 March 2002 violated Sections 10(b) and 20(a) of the Securities Exchange Act of
1934 and Rule 10b-5 thereunder. The complaints sought, among other things,
unspecified damages on behalf of the purchasers of the Company’s securities during
the period between 7 March 2001 and 28 May 2002. On 9 October 2003, the Court
ordered that the complaint be dismissed, with leave for the plaintiffs to re-plead. On
10 November 2003, the plaintiffs filed a second consolidated amended class action
complaint, which contained allegations and claims which were substantially similar to
those in the original complaint and it added allegations that certain other statements
by one or more of the defendants were materially false or misleading and in violation
of the United States Federal Securities laws. That new complaint no longer included
Lord MacLaurin as a defendant. On 26 March 2004, the Court struck a number of the
allegations in the second consolidated amended complaint and dismissed without
prejudice all of the individual defendants from this action. It also gave the plaintiffs a
further opportunity to re-plead. On 7 May 2004, the plaintiffs filed a third consolidated
amended class action complaint. The new complaint names only the Company as a
defendant and contains allegations and claims which are substantially similar to those
asserted in the prior complaints. The Company intends to defend the action vigorously.
in accordance with expected time schedules, there is no assurance that revenues
from such services will increase ARPU.
The Group’s business and its ability to retain customers
and attract new customers may be impaired by actual
or perceived health risks associated with the
transmission of radiowaves from mobile telephones,
transmitters and associated equipment.
Concerns have been expressed in some countries where the Group operates that the
electromagnetic signals emitted by mobile telephone handsets and base stations may
pose health risks at exposure levels below existing guideline levels and may interfere
with the operation of electronic equipment. In addition, as described under “Legal
Proceedings”below, several mobile industry participants, including the Company and
Verizon Wireless, have had lawsuits filed against them alleging various health
consequences as a result of mobile phone usage, including brain cancer. While the
Company is not aware that such health risks have been substantiated, there can be
no assurance that the actual, or perceived, risks associated with radiowave
transmission will not impair its ability to retain customers and attract new customers,
reduce mobile telecommunications usage or result in further litigation. In such event,
because of the Group’s strategic focus on mobile telecommunications, its business
and results of operations may be more adversely affected than those of other
companies in the telecommunications sector.
Risk Factors and Legal Proceedings continued