UK Government Sets Out National-Security Requirements for E&, Vodafone Link-Up

By Ian Walker

The U.K. government has set out requirements that Vodafone Group and largest shareholder Emirates Telecommunications Group Co. must comply with in their relationship, saying that the UAE state-owned company's potential influence at Vodafone could trigger a national-security risk.

The potential risk to national security relates to Vodafone's role in the U.K. government's initiatives in the telecommunications sector and contribution toward cyber security, the Secretary of State said in a statement on its website dated Wednesday. It said a security risk could arise from Vodafone's ability to act as a supplier to the government, including departments that are in support of national security.

Emirates Telecommunications--known as E&--has a 14.6% shareholding in Vodafone.

The companies must establish a National Security Committee to oversee sensitive work that Vodafone and its group perform which has an impact on, or about the national security of the U.K., the government said.

They must also notify the government of any changes to their relationship agreement and meet requirements to Vodafone's board composition as well as changes to board committee membership and functions.

Last May, Vodafone and E& agreed to a strategic relationship, with the latter becoming a cornerstone shareholder in the U.K. telecom company.

At the time, Vodafone said the relationship would enable collaboration in a range of areas, including cross-border digital services, fixed and mobile connectivity, procurement roaming.

It also said that E& chief executive would join the Vodafone board as a nonexecutive director as long as E& maintained its shareholding of 14.6%. E& would also have the ability to nominate a second nonexecutive director if its shareholding exceeds 20%, Vodafone said at the time.

"We are pleased to have received clearance in our home market for our strategic relationship agreement with E&, and for E& to take a seat on our board," a Vodafone spokesperson said Thursday.

E& didn't immediately respond when approached for comment.

Write to Ian Walker at [e-mail]

(END) Dow Jones Newswires

January 25, 2024 10:26 ET (15:26 GMT)

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