HUMILIATION OF £70M TYCOON
Sorrell’s own company hires THREE law firms to probe him over misuse of cash
MULTI-MILLIONAIRE advertising boss Sir Martin Sorrell faced humiliation yesterday as his own firm hired lawyers to probe allegations of personal misconduct.
The chief executive of WPP, the world’s largest advertising company, is said to have misused cash – believed to relate to air tickets and travel expenses.
Three top law firms are involved in the probe against Sir Martin, a leading opponent of Brexit. He is one of the world’s richest executives, taking home £70million in 2015 in a pay day that shocked even some WPP investors.
Sir Martin – whose total wealth was estimated at £495million by The Sunday Times Rich List last year – ‘unreservedly’ denied the financial allegations but said he recognised why the company had to investigate them.
He has not been suspended and was at work in WPP’s London office yesterday. It is understood a whistleblower came forward with claims about him to the company’s board.
A source said the whistleblower was ‘a very credible witness’ and that the board members were ‘taking the claims very seriously’.
Sir Martin, 73, founded WPP in 1985 and turned it into a global empire with 200,000 staff in 112 countries.
But yesterday, amid speculation of a boardroom coup, the Financial Times said he had lost control of his firm.
Elsewhere it was reported there was tension among members of WPP’s 12-strong board, with ‘ at least one director known to be agitating to oust him’. Another City source said: ‘ There is an agenda here. There is no need to go through this.’
Last night a WPP source said the allegations involved financial misconduct and Sir Martin’s behaviour, adding: ‘We are not talking a massive amount of money. The behaviour is the main aspect.’
The source insisted there was no boardroom rift, adding: ‘There is genuinely nothing there other than these allegations which have required these investigations to happen.’ The personal misconduct accusations have not been specified. Sir Martin has faced down several controversies in recent years and the subject of who will succeed him is raised at every WPP annual meeting.
His enormous pay – about ten times that of the average FTSE 100 boss – has attracted adverse publicity. Until recently he received £274,000 to pay for his wife Cristiana – an Italian economist almost 30 years his junior – to accompany him on business trips.
This year began with unwelcome headlines for WPP as it was revealed as a key backer of the Presidents Club annual charity dinner, where women staff complained of being harassed and groped. Sir Martin told Radio 4’s Today programme he had ‘never seen anything like that’, as he cut all ties with the dinner.
Yesterday WPP’s shares fell two per cent, wiping £285million off its value and £4million off Sir Martin’s personal 1.4 per cent stake. Another WPP source said: ‘People in the company are in complete shock. But there has been a lot more preparation for Martin Sorrell’s departure than people realise.’
Sir Martin said in a statement yesterday: ‘WPP is investigating an allegation of financial impropriety by me, specifically as to the use of company funds. This allegation is being investigated by a law firm. I reject the allegation unreservedly but recognise that the company has to investigate it.
‘I understand that this process will be completed shortly. Obviously, I shall play no part in the management of the investigation under way.’
Three law firms, including Allen & Overy and Slaughter and May, are understood to have been hired by WPP. A fourth, Lewis Silkin, has been retained by Sir Martin.
WPP said in a statement: ‘ The board of WPP has appointed independent counsel to conduct an investigation in response to an allegation of personal misconduct against Sir Martin Sorrell. The investigation is ongoing. The allegations do
‘Taking the claims very seriously’ ‘Rival agitating to oust him’
not involve amounts which are material to WPP.’
WPP has paid a ‘substantial’ sum to settle a lawsuit from a female executive.
Erin Johnson, chief communications officer of WPPowned New York ad agency J. Walter Thompson, had accused a former boss of an ‘unending stream of racist and sexist comments as well as unwanted touching and other unlawful conduct’.