Vodafone is alleged to have spied on its own directors during the boardroom dispute over the strategy being pursued by Arun Sarin in 2006 which lead to the departure of chairman Lord MacLaurin and the resignation of former chief executive Sir Chris Gent from his role as life president.

 The UK's Mail on Sunday newspaper is claiming that both Lord MacLaurin and Sir Chris Gent were spied on by two years ago - and while the operation stopped short of evesdropping on phone calls, but did include logging who calls were made to as well and who they sent text messages to.

There is an ongoing scandal engulfing Germany's Deutsche Telekom which has also been alleged to have spied on its directors to shut down leaks to journalists.

Vodafone confirmed that it had investigated the board but added: "Vodafone is completely confident it never deliberately or knowingly conducted any investigation in contravention of the UK Data Protection Act or other laws."

At the height of the Vodafone boardroom bust-up, there were reports that the former head of Vodafone, Sir Chris Gent had considered voting against the re-election of Arun Sarin as Chief Executive of the company. During the 2006 annual meeting, some ten percent of the shareholders voted against Sarin's reelection as CEO. Gent had earlier opposed the appointment of Andy Halford as Vodafone's new finance director who was being supported by Sarin.

In his final statement in its 2006 annual report, Lord MacLaurin told shareholders: "There are no factions within the board, and any claim that your board is not united is unfounded." MacLaurin said in the annual report that he was "saddened...by the nature of some of the media coverage, and particularly by the suggestion of boardroom splits."

In March, former Chief Executive Christopher Gent quit as honorary life president, saying he didn't wish to continue if there was to be a "disinformation campaign" about the company.

The Mail on Sunday newspaper says that the Vodafone spying case appears to fall into a legal grey area, but the behaviour was described by one source familiar with the situation as "outrageous treatment of two of the great figures in recent corporate history".

The paper did not clarify who ordered the monitoring of the directors phone calls - or if Arun Sarin was aware of the investigation.

Source: Mail on Sunday