UK Business Secretary Jonathan Reynolds has been urged to refer telecoms giant Vodafone to the Covid corruption commissioner following allegations that the £18 billion company benefited from pandemic financial support designed for small businesses.
The claims stem from a high court case filed last month by current and former Vodafone franchisees, accusing the company of being “unjustly enriched” at the expense of vulnerable small business owners managing its high street stores.
Conservative MP and former minister John Hayes called on Reynolds to act in light of these allegations.
In a letter, Hayes wrote, “Given the allegations about potential misuse of government Covid financial assistance, will your department refer these allegations to the ongoing inquiry into potential misappropriation of public funds during the pandemic, and the Covid corruption commissioner?”
Tom Hayhoe, appointed by Shadow Chancellor Rachel Reeves as Covid corruption commissioner, has been tasked with recovering billions lost in fraudulent contracts during the pandemic.
While his current focus is on the misuse of personal protective equipment (PPE) procurement, Hayhoe also has the authority to investigate broader pandemic spending, including furlough, bounce-back loans, and Covid grants.
The controversy follows a £120m legal claim filed by 61 Vodafone franchise operators, alleging the company acted in “bad faith” by unilaterally slashing franchise fees, imposing severe fines for minor administrative errors, and pressuring operators to take loans and government grants to stay afloat.
Legal documents claim Vodafone gathered data on state relief provided to franchisees and used this knowledge to reduce commission payments owed to them.
These actions, it is alleged, effectively allowed Vodafone to profit from government schemes intended to support small businesses during the crisis.
Some franchisees have reported experiencing extreme stress, with several expressing suicidal thoughts due to the financial pressures imposed by Vodafone. Many claim they have been left with personal debts exceeding £100,000.
Vodafone has denied receiving government funds directly, stating that the “uptake of [government support] was at the discretion of the franchisee.” However, the company has not refuted claims that it benefited indirectly from taxpayer-funded schemes.
This mounting legal and public scrutiny raises questions about corporate ethics and accountability during the pandemic, as the government intensifies efforts to recover misappropriated public funds.
