Sorrell accused of using funds for sex worker
Sir Martin, former chief executive of the global advertising giant, denies allegations ‘unreservedly’
Sir Martin Sorrell was accused of personal misconduct and misuse of company funds in relation to the procurement of a sex worker before he left the advertising giant WPP.
The details of the allegation against Sir Martin emerged as Roberto Quarta, the WPP chairman, prepared to face shareholder anger over his handling of the affair at the firm’s AGM this week.
A spokesman for Sir Martin said he “strenuously denies” the claims.
SIR MARTIN SORRELL was accused of personal misconduct and misuse of company funds in relation to the procurement of a sex worker before he left advertising giant WPP.
The details of the allegation against Sir Martin, which he has rejected, emerged as Roberto Quarta, the WPP chairman, prepared to face shareholder anger over his handling of the affair at the firm’s AGM this week.
Sources with direct knowledge of the investigation into the allegation against Sir Martin said a whistleblower came forward with verbal claims he misused WPP funds in the procurement of a sex worker. It is understood that the whistleblower was an ex-employee who did not produce any evidence to support his claims.
A spokesman said that Sir Martin would not comment on the investigation but “strenuously denies” the claims that were made against him.
Sir Martin stepped down after 33 years in charge of WPP in April following an investigation into personal misconduct, which he denied. The 73-year-old chief executive’s relentless dealmaking transformed WPP from an obscure basket-maker into a global advertising empire.
His fortune was estimated at nearly £500 million last year but has declined along with
WPP’S share price in recent months. While still at WPP he typically appeared near or at the top of the FTSE 100 pay leaderboard. He has three sons, all of whom have been bankers at Goldman Sachs.
Shareholder groups have called for an AGM revolt against Mr Quarta – who became executive chairman while WPP searched for a new chief executive – over the company’s failure to disclose the allegations it had investigated.
WPP and Sir Martin signed a confidentiality deal as part of the compromise. His “good leaver” status means he remains entitled to an exit package worth as much as £20 million. Concerns over the terms of his exit have been further stoked by his swift establishment of a new listed advertising group, S4 Capital.
Mr Quarta is expected to survive the vote on Wednesday as the City’s most influential shareholder advisory body, ISS, urged clients to support him.
Prior to his resignation, Sir Martin said he “reject[s] the allegation unreservedly but recognise[s] that the company has to investigate it”.
His spokesman said: “Sir Martin entered into a non-disclosure agreement at the time of his departure which he has and will continue to respect. He has no further comment.”
A WPP spokesman said: “WPP has been advised that it cannot disclose details of the allegations ... because it is prohibited by data protection law from giving such details. Martin chose to resign at the conclusion of the investigation by independent legal counsel. He remains entitled to his performancerelated LTIP awards up until the date of his retirement ... under the terms of his contract of employment entered into in 2008, which predated any of the current members of the board. The allegations did not amount to gross misconduct as defined under the terms of the contract. Should he ever be in breach of his confidentiality undertakings ... he could jeopardise his remaining LTIP
entitlement.”