Sarin

London, May 27: India today lost a powerful ally in the upper echelons of world business when Arun Sarin shocked friend and foe alike by announcing his decision to step down as the chief executive officer of Vodafone, the global mobile-phone market leader.

He said: “I feel that I have accomplished what I set out to achieve, particularly in developing and implementing a new strategy. I am very proud of what Vodafone and its 71,000 people have achieved and the good momentum we have in the marketplace.”

The 53-year-old Indian, who last year masterminded the record £5.7-billion purchase for India of a controlling stake in Hutchison Essar, will head back to his home on the US west coast after Vodafone’s AGM on July 29, when he will be succeeded by his Italian deputy, Vittorio Colao.

But there remains a mystery about why Sarin has chosen this moment to bid farewell, especially as Vodafone today announced better-than-expected results, with a 10 per cent rise in profits to £13.2 billion.

A possible explanation was offered to The Telegraph by the food tycoon, Sir Gulam Noon, who compared Sarin with the former England cricket captain Nasser Hussain, who chose May 27, 2004, to announce his retirement from the game just three days after scoring 103 not out against New Zealand at Lord’s.

“Remember, Nasser Hussain retired from first-class cricket immediately after scoring a century, rather than risk being dropped one day by the selectors,” emphasised Noon. “I admire Arun Sarin, a courageous, non-traditional, unconventional man whose departure is making headlines today.”

Two years ago, Sarin fought off an attempt to knife him in the back when 10 per cent of Vodafone shareholders voted against his re-election as CEO. He may have reckoned it was better to leave at the top of his game.

“It has been a privilege to lead Vodafone for the last five years and to have been involved in the company for such a long time,” Sarin commented today in a statement.

He added that he was “looking forward” to taking a sabbatical and travelling after retiring from his post. He also confirmed that he would be returning to the US, but denied reports that he was planning to join a private equity firm, saying only that he had “no specific plans”.

Sarin received a warm commendation from Sir John Bond, Vodafone’s chairman, who said: “Arun has done a tremendous job as chief executive. He has led the company with distinction and navigated Vodafone through a period of rapid change. He has developed a new strategy for the business and significantly expanded our footprint in emerging markets.”

Bond remarked: “The acquisition in India was very well timed and executed. The board has a great deal to thank him for, and I would like personally to thank him for all he has done for the business and wish him and his family all the best for the future.”

Sarin, too, underlined that the company had performed well under his leadership.

He said: “Our strategy is continuing to deliver strong results and is reinforcing our leadership position in the communications industry. We have increased our customer franchise to 260 million, up 26 per cent.”

He also said: “Adjusted earnings per share grew 11 per cent and we met or exceeded guidance on every measure. Free cash flow of £5.5 billion underpins our 11 per cent increase in dividends per share. We are driving our strategy across our diverse portfolio in order to continue to generate consistent, strong cash flow and superior returns for our shareholders.”

All this makes his departure even more curious, unless one accepts Noon’s explanation.

His absence will be felt keenly by India’s corporate and political leadership. He often made time to attend key Indian business events, such as Kamal Nath’s London launch of his book, India’s Century: The Age of Entrepreneurship in the World’s Biggest Democracy, when Sarin and Lakshmi Mittal were the ranking tycoons in the room.

What probably rescued Sarin was his venture into India. Two years before the Hutchison Essar deal, he invested $1.5 billion in buying a 10 per cent stake in Sunil Mittal’s Bharti Tele-Ventures Ltd (BTVL).

Today’s statement from Vodafone acknowledged as much when it noted: “As part of its strategy, Vodafone has also expanded into emerging markets including Romania, Czech Republic, Turkey and, most recently, India, where Arun Sarin led the acquisition of Hutchison Essar, which is the largest foreign investment made in the country.”

It repeated what Sarin had himself said: “During his time as chief executive, the company has also grown its proportionate customer base from 120 million to more than 260 million globally and over this period, Vodafone has consistently delivered strong results.”

Sarin was born in India (October 1954, Pachmari, Madhya Pradesh), shone at IIT Kharagpur (he won the prestigious B.C. Roy Medal for being the best all-around student), and prospered in America (an MS in Engineering and an MBA from the University of California at Berkeley).

He told his university newspaper: “My growing up in India was a huge advantage when I became part of corporate America; there were not a lot of people who had that worldview.”

Some analysts were sceptical when the Indian was brought from America to replace the patrician Sir Christopher Gent as CEO of Vodafone in July, 2003.

“I wouldn’t class him as the ideal replacement for Chris Gent,” Telecoms analyst Damien Maltarp at Banc of America had sniffed. “I think a lot of people will be asking who he is.”

Today, at least, the stunned reaction of the market indicates many would have preferred him not to quit just at this moment.

As Sarin prepares to resume life in America with his wife, Rummi, whom he had met at Berkeley, his daughter, Nina, 21, a Stanford University graduate, and his son, Neal, 16, the Financial Times almost made him sound like Shane who rides into the valley to sort out the baddies: “He rode out attacks on his strategy, survived attempts to fire him and presided over the growth of Vodafone into a world-class business.

“His roots in an Indian military family and prowess in the boxing ring as well as on the hockey field equipped him to cope with bouts of political infighting and baying institutions. His record does not qualify as unblemished, but Sarin leaves with his reputation enhanced and Vodafone well placed to continue to make further inroads into the mobile phone market.”