Daily Management Review

WPP launches an internal investigation of Martin Sorrell's activities


04/04/2018


The world's largest advertising holding, the British company WPP, announced beginning of an investigation into the possible unlawful conduct of its permanent head Martin Sorrell. In particular, invited lawyers should check whether there are grounds for accusing Mr. Sorrell of misuse of WPP assets and of unworthy personal behavior. The head of the WPP denies his guilt.



Eirik Solheim via flickr
Eirik Solheim via flickr
A statement by the British advertising holding WPP noted that the board of directors of the company "invited a group of independent lawyers to investigate against the CEO of WPP Martin Sorrell on the fact of possible unworthy personal behavior." The report clarifies that "it's not about the amounts that are significant for WPP." The company does not give other details.

The Wall Street Journal (WSJ), referring to sources, reports that the head of the advertising company is suspected of misusing the assets of WPP. Commenting on the situation in the internal letter for the employees, the management of the holding noted that its activity "continues in the normal mode", "work with customers is unaffected and is maintained smoothly." A letter from the WSJ was handed over by two employees of the company, who wished to remain anonymous.

Martin Sorrell founded the WPP in 1985, investing in a producer of plastic baskets for shopping centers and redesigning it into an advertising company that has developed over the years to become the world's largest advertising holding company. Now WPP owns various companies working in the field of advertising, PR, market research, media, etc. It clientele counts in giants such as Ford, Unilever, HSBC, Procter & Gamble. It employs more than 205 thousand people in more than 100 countries around the world. Revenues of WPP in 2017 reached £ 15.3 billion, net profit - £ 1.9 billion. However, the beginning of this year turned out to be the weakest since the financial crisis of 2009. In general, over the past 12 months, shares of WPP on the London Stock Exchange fell by 35%. The news of the beginning of the investigation against Mr. Sorrell led to their further fall by 2.5%. 

Martin Sorrell himself denies his possible guilt. "The WPP is investigating suspicions of financial irregularities allegedly committed by me, in particular regarding the use of company funds," he wrote in his statement. "I reject my guilt flatly, but I think that the company still needs to conduct an investigation." Mr. Sorrell also expressed confidence that this procedure will be completed quickly. "As the owner of a significant stake in the company that I founded over 30 years ago, I declare that my devotion to it remains unconditional, devotion to our employees, our customers, our numerous shareholders," he assured.

source: ft.com






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