Vodafone has surrendered any right to decide its destiny after a decade of "incompetence" and "failure" and should

put itself up for sale, a leading Australian hedge fund boss said on Wednesday. In a searing critique of the British mobile giant's global empire, John Hempton of Bronte Capital has called for the board to be sacked if it sells the company's most precious asset, a 45% stake in the leading US carrier Verizon Wireless. The holding could be worth $115bn (75bn) to Verizon Communications, the fixed-line phone company which owns the other 55%, and there has been speculation Vodafone could cash in and spend the money on European expansion. In a widely read blogpost on Wednesday, Hempton said selling Verizon would mark out "an important part of the British business establishment" as "both venal and incompetent". He added: "With the demonstrated record of failure of Vodafone over the past decade, Vodafone has surrendered its right to make a deal any deal which leaves management to squander the proceeds from the best asset they have the only asset they did not manage." Bronte's third-largest shareholding is Vodafone and it has taken a long hedge position on the stock, which means it assumes the share price will rise. It would prefer either no deal, or for Verizon to buy the British company outright because selling just the US business would incur a huge tax bill. Analysts at Bernstein Research tentatively estimate the tax bill on any Verizon windfall would be around $20bn. If Vodafone were sold as a whole the company's market value stands at nearly 90bn long-term shareholders would be unlikely to pay much capital gains tax on the deal because the share price has not risen significantly in a decade. "Any deal where Vodafone sells its Verizon Wireless stake rather than selling itself starts with a tens-of-billions of dollars disadvantage in post-tax shareholder value. It would be insane," said Hempton. He said such a transaction should only be countenanced if management were able to take the cash and invest it successfully. Vodafone's chief executive, Vittorio Colao, has outlined an ambition to take Vodafone into fixed-line communications, with the company offering a combination of mobile contracts, home broadband and television in Europe. In a country-by-country analysis, Hempton cast doubt on Vodafone's ability to manage its widely scattered businesses, saying its record is a "collection of modest success and abject failures". The Bronte Capital website claims it makes money by short-selling the shares of companies classed as "frauds, fads or failures". It rose to prominence after lobbying to expose fraud at Longtop Financial Technologies, a New York-listed Chinese financial software company. Deloitte resigned as auditor and the company's shares were suspended. From his base in Bondi Beach, Hempton has been able to witness first-hand the problems that have dogged Vodafone's Australian network. A joint venture with Hong Kong conglomerate Hutchison Whampoa, it has been criticised for poor coverage and has lost 1 million customers in two years. Smartphone owners locked into 24-month contracts complained of being unable to use their expensive handsets, and Vodafone-bashing became a national pastime, with Vodafail one of the most widely used terms on Australian Twitter.

Vodafone's Indian venture, which began with the purchase of local network owner Hutchison Essar in 2007, has been scarred by a six-year battle with the Indian government, which is demanding 1.55bn in unpaid capital gains taxes. "In India you don't get into that much trouble if you are culturally alert," said Hempton. Vodafone has pointed out in the past that capital gains tax is normally paid by the seller not the buyer, and that the Indian government retrospectively changed the law to make the tax payable five years after the purchase. Vodafone's UK business has been hampered by the fact that it overpaid for spectrum during the dotcom bubble, along with many other networks. The UK is one of the most competitive telecoms markets in Europe, with four operators and a number of strong virtual networks such as Virgin Mobile, and accounts for just 4% of the group's operating profits. Turkey is named as a standout success. Vodafone has made the most of the country's blossoming economy, growing revenues by 18% at the last count, and increasing its market share. However, Hempton saves his highest praise for Verizon Wireless, which Vodafone does not manage, but which has become America's largest and most profitable mobile business. "It has been a good no, a fantastic asset and their stake is now worth more than the entirety of Vodafone." Xxxxxxxxxxxxxxxxxxxxxxxxxx Samsung will unwrap its latest blockbuster smartphone, the Galaxy S4, at the Radio City music hall in New York on Thursday evening as the South Korean phonemaker tries to bring the fight to Apple's home market. With Samsung rumoured to have ordered a production run of 100m handsets and research firm Strategy Analytics predicting the S4 will ship 60m units by Christmas, Seoul is going head to head with Silicon Valley for dominance of smartphone sales. The Guardian will be reporting live from the unveiling of Samsung's most hyped handset yet when proceedings begin at 11pm GMT (7pm EST). Expected big features include wireless charging to a screen controlled not just by touch but by eye movements. The Galaxy S4 should outdo the latest iPhone in areas such as photography and processing power, if the leaks are correct, but will still lag behind Apple on the quality of materials and the selection of apps available to the Google Android operating system it uses. Every leaked screenshot so far suggests Samsung will retain the Galaxy's shiny plastic case, leaving Apple, which prefers aluminium, steel and glass, in its own category when it comes to external appearances. The most eyecatching new feature is likely to be an extension of the ability to control the touchscreen using eye movements. A front-facing camera tracks the gaze, which in existing Galaxy phones is already used to stop the screen going dark while pages are being read, and to adjust the picture to the viewer's line of sight.

Trademarks called "eye scroll" and "eye pause" were registered by Samsung in Europe in January, suggesting two new functions, and these appeared to be confirmed by screenshots posted to specialist website SamMobile on 6 March. The shots showed a menu of options, including one to "select the speed of scrolling when the device detects that your head is moving up and down", and suggested it would apply to emails and web pages. The menu also stated: "The device pauses videos when it detects your head moving away from the screen." The rear facing camera is reported to be 13 megapixels, compared with the iPhone 5's 8, while the front-facing camera is also higher at 2 megapixels, which should improve the quality of video calls and self-portraits. The S4's screen should be larger too, at nearly 5in (12.7cm) on the diagonal, an inch more than the iPhone 5. Processors with two cores are enough to make Apple's latest phone one of the fastest in the world but the S4 is understood to feature Samsung's eight-core Exynos 5 processor. Like Nokia's flagship Lumia handset, the S4 will, according to South Korean publication DDaily, have the option of being charged wirelessly. Rather than using leads the phone is placed on a charging mat, which is itself is plugged into the mains. The wildest rumour so far, put forward by Patently Apple, which monitors intellectual property filings, is that of a 3D camera for still shots and videos. The US Patent and Trademark Office published a filing last week by Samsung that shows a logo for such a feature. Doubters say 3D images make uncomfortable viewing and have not been popular with buyers of television sets or in the few smartphones that already feature them. Where Apple retains a lead over Samsung is in its apps store. Google's Android software platform, which Samsung uses for the Galaxy devices, has attracted a large number of developers and its store is predicted to be the first to reach 1m apps. But content creators still reserve their best products, such as new games, for iOS software because Apple's customers spend more than Android's. Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx he Bank of England warned on Thursday that the next phase of the UK's six-year financial and economic crisis may be triggered by the collapse of debt-laden companies bought by private equity firms in the boom years before the crash. In its latest quarterly bulletin, Threadneedle Street said the need over the next year to refinance firms subject to heavily leveraged buyouts posed a systemic threat.

The Bank added that it would use its new role as the watchdog of the City to monitor private equity deals in future "episodes of exuberance" to prevent a repeat of the debtdriven takeover boom in the run-up to the banking crisis. "In the mid-2000s, there was a dramatic increase in acquisitions of UK companies by private equity funds," the Bank said. "Many of these buyouts, especially the larger ones, were highly leveraged and the increased indebtedness of such companies poses a risk to the stability of the financial system a risk that is compounded by the need for companies to refinance debt maturing over the next few years in an environment of much tighter credit conditions." Noting that there had been a surge of private equity deals in the first six years of the last decade, the Bank said a feature of the investments had been the use of debt. Buyouts were typically financed by money borrowed from banks, with the debt becoming the liability of the purchased company. There was evidence, it said, that private equity companies had been particular beneficiaries of "forbearance" by commercial banks the tendency of lenders to go easy on borrowers for fear that they might go bust. But it said a refinancing challenge was looming in 2014, because the peak in debt issuance was in 2007 and the average maturity of leveraged buyout debt is seven years. Deals became bigger and bigger as the decade wore on, and this trend coincided with a loosening of credit conditions by banks, which made debt finance even more attractive as they vied for business. The study cited the case of Royal Bank of Scotland, now 83% owned by the taxpayer after being rescued from collapse by the Treasury in October 2008. An aggressive expansion into leveraged finance was an important factor in RBS's credit losses, Threadneedle Street said. Owners of private equity companies say the buyouts help to make companies more efficient by spurring management to provide regular interest payments on the debt. But the Bank said there were also potential downsides to private equity, including the risk that the pressure for short-term returns would starve companies of long-term investment. "A consequence of the increased use of debt financing on buyouts in the mid-2000s was that debt to earnings ratios, in particular on deals in excess of 100m, climbed to persistently high levels. "One risk to the UK financial system from these debt levels is the heightened fragility of the corporate sector. Specifically, higher debt levels could make companies less likely to undertake long-term investment if that investment is crowded out by the costs of servicing debt."

In a separate article in the bulletin, the Bank said it would expect to make a profit on the purchase of gilts under the 375bn quantitative easing programme unless the announcement that the scheme was to be reversed triggered a big rise in long-term interest rates. The Bank has been making money on its gilt purchases since QE began in early 2009 because the price of government bonds has risen. When the time comes for QE to be reversed, the Bank expects the fall in bond prices to push up yields a measure of the cost of borrowing on gilts. Work by the Bank's economists has shown that the state would still make a small profit on QE if yields on 10-year gilts rose from 2% to 5% but there would be a 5bn loss if they increased to 6%. Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxx