Vodafone Group was ordered to establish a committee to oversee any work deemed to have an impact on UK national security, after authorities flagged the operator’s strategic relationship with UAE-based shareholder e& as a potential risk.    

The order by the UK Cabinet Office requires the formation of a National Security Committee alongside imposing various requirements on Vodafone’s board composition. The operator must also inform authorities of any alteration to its current arrangement with e&.

Explaining the move, the government said the moves are considered “necessary and proportionate to mitigate the risk to national security”, highlighting Vodafone UK’s role in supporting the state’s domestic and international initiatives, contributing to its cybersecurity and as a supplier to government departments.

The government noted the relationship enables e& to materially “influence the policy” of Vodafone. 

Operator e& owns a 14.6 per cent stake in Vodafone, having gradually built the shareholding in the year from May 2022.

A year after its initial investment, e& and Vodafone announced a strategic relationship they claimed would bring them “closer together in certain aspects of their businesses”.     

As part of the deal, the CEO of e& was given a spot on Vodafone’s board subject to regulatory approvals, with the UAE business also given the opportunity to nominate an independent non-executive director if its stake rises above 20 per cent.