WPP boss Sir Martin Sorrell rejects allegation of financial impropriety "unreservedly"

Marsha Scott
April 7, 2018

I reject the allegation unreservedly, but recognise that the company has to investigate it.

Sir Martin Sorrell, WPP's long-serving and influential chief executive, is being investigated over allegations of personal misconduct and misuse of company funds.

In a separate statement, Sorrell acknowledged that an investigation is ongoing, but denied any impropriety.

According to the company, the allegations levelled against Sorrell are not financially material to WPP.

Sorrell, who has tirelessly expanded WPP during his three-decade tenure, said he "obviously" will play no part in managing the investigation, and said his commitment to the organization is unwavering. Barclays decreased their target price on shares of WPP from GBX 1,450 ($20.35) to GBX 1,375 ($19.30) and set an "equal weight" rating on the stock in a research report on Friday, March 2nd.

Although the company unequivocally owes much of its success to Sorrell, the 73-year-old British businessman is not immune to criticism.

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The board of the world's largest advertising company is investigating a claim against Sir Martin Sorrell, an icon in the advertising industry.

Sources also told The Wall Street Journal the investigation is looking into possible misuse of company assets.

Sorrell built London-based WPP from an investment in a shopping-basket manufacturer into the owner of blue-chip agencies.

The legacy ad giant saw flat like-for-like, top-line growth a year ago, on top of flat operating margins and profits. This remains the case even though the shares have lost a third of their value in the past year.

The conglomerate, which own 400 agencies including Ogilvy & Mather, said that sales will be flat this year, and long term earnings growth could drop as low as 5%. Sorrell was also forced to take a cut in his pay, the amount he was forced to back down from 2017's 48 million pounds sterling, will become clearer in the next few days as it announces its financial performance.

In early-afternoon Wednesday trading in London, WPP's share price was down 2.2 percent at 1,094 pence.

Other reports by MaliBehiribAe

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