Arun Sarin, the embattled chief executive of mobile phone giant Vodafone, yesterday said a shareholder rebellion aimed at removing him from the group will end in failure.
The chief executive insisted he would see off an expected revolt by a coterie of large institutional investors, who are planning to vote against his re-election to the board at today's annual meeting.
"To the best of my knowledge, all of the resolutions we have at the AGM will pass with strong votes. I have a sufficient level of support from the shareholders and the board to continue running the company," Mr Sarin said after Vodafone released a first-quarter trading update.
Mr Sarin's stewardship of Vodafone has come under intense scrutiny over the past year, with three profit warnings and a perceived lack of strategic clarity sparking a 25 per cent plunge in the share price and bitter recriminations at board level.
Morley Fund Management, which owns 2.1 per cent of Vodafone, on Friday took the unusual step of announcing it would vote against Mr Sarin's re-appointment.
And Hermes and Standard Life will join the growing band of rebels, who together control ten per cent of Vodafone.
Mr Sarin said the dispute was the inevitable consequence of a rapidly changing mobile phone industry.
"Any time you go through the kind of change you're going through now, there will be one or two or three people unhappy about what is going on," he said.
Investors' main gripe with Vodafone is a lack of clarity on the future direction of the company. Just a year ago Vodafone was committed to building on the global network of operators assembled by Sarin's predecessor, Christopher Gent.
But intensifying competition in its core European markets put Vodafone on the back foot, and the eventual sale of its underperforming Japanese business earlier this year was a tacit admission that a business model based on a "global footprint" was not working.
Vodafone yesterday suffered another setback when it emerged that Bill Murrow, a long-standing executive recently appointed to oversee a restructuring of Vodafone's ailing European division, had decided to quit "for family reasons".
However, Mr Sarin insisted that Morrow's departure "had nothing to do with boardroom disputes" of earlier this year.
Yesterday's trading update underlined how difficult trading has become in Vodafone's core European markets, where penetration rates are often above 100 per cent.
Service revenues fell 2.9 per cent and 3.4 per cent in Germany and Italy respectively, mainly due to regulatory cuts to mobile phone termination charges. Its UK business reported service revenue growth of 1.3 per cent, slightly better than expected.
The mobile phone giant signed up an extra 4.5 million customers at its continuing business in the three months to the end of June, which was about 500,000 ahead of expectations. That allowed Vodafone to reiterate its targets for the current year. The group is looking for organic mobile revenue growth of 5 to 6.5 per cent for the fiscal full year, with EBITDA margin falling by around one percentage point.
"Whilst many markets in Europe remain highly competitive, we are on track with our revenue and cost initiatives in this region," said Mr Sarin.
Vodafone has been investing in emerging markets like Turkey and India to offset weakness in Europe. Last year's takeover of Turkish operator Telsim saw a further 11.7 million subscribers come on board, taking its total customer base to 186.8 million by the end of the quarter.
Another area growth of growth identified by Vodafone is broadband, and Mr Sarin said the company would launch bundled internet access and mobile products in its top eight countries by the end of the financial year.
Overall, group turnover rose 6.4 per cent on an under-lying basis in the first quarter, fuelled by a 4.5 per cent rise in group mobile service revenues.
Shares closed up 4p at 115.25p.