Authorization

Sorrell stokes WPP tensions over boardroom exit

By Mark Kleinman, City editor
The WPP Group founder Sir Martin Sorrell has stoked hostilities with his former employer by questioning the departure of a Chinese board member even as it reshapes its business in the world's second-largest economy.
Speaking to Sky News, Sir Martin said the resignation of Hugo Shong as a non-executive director - which was announced earlier this week - "saddened and disturbed" him.
Mr Shong has served on WPP's board since 2013, and has an extensive network of business interests in China.The FTSE-100 marketing services group said he would step down as a director because of his "additional commitments outside WPP and increased pressure on his time and availability".WPP has another Chinese non-executive director, Ruigang Li, reflecting the country's importance to a marketing services group which has been expanding its presence as China's fast-growing middle classes have amassed huge purchasing power.Sir Martin's decision to comment publicly on boardroom changes at the company he built into the world's largest advertising agency holding company is likely to antagonise his former colleagues.As the largest personal investor in WPP, with much of his wealth tied up in the company's stock, his remarks will also reinforce a perception in the City that his new venture, S4 Capital, will compete head-on with it.He said: "As a shareowner, I'm very saddened and disturbed by the departure of Hugo Shong from the WPP board, particularly at a time when WPP is trying to develop and reposition its business in China."Along with Ruigang-Li, over the last six years, he has been a significant factor in the growth and development of WPP's China business in what is now its third largest market. It is not good news."
The news of Mr Shong's resignation came just days after Sky News revealed that WPP was in talks with two of China's biggest technology companies - Alibaba and Tencent - about taking a stake in its operations in the country.Responding to Sir Martin's remarks, a WPP spokesman said: "While the board was sorry that Hugo felt he could no longer serve as a director with the increased pressure on his time and availability, it is pleased that he will continue to assist WPP's businesses in China going forward, and WPP's board is also privileged to have Ruigang Li amongst its non-executive talent."The talks about a deal to sell a minority stake in WPP China would be likely to value the unit at around $2.5bn (€1.9bn).China Media Capital Holdings (CMC) is also part of the consortium in early-stage discussions about the deal, which is understood to have originated during discussions between Sir Martin and Mr Ruigang‎.WPP is continuing to hunt a successor to Sir Martin, the 33-year company veteran ‎who stepped down in April following an investigation into his personal conduct.They have already clashed over S4's acquisition of MediaMonks Holdings, a Dutch digital agency for which WPP had also bid.
More from Business

Ryanair refuses to compensate passengers for cancelled flights amid pilots strike


Facebook shares plunge 24% as user growth slows


Sky reports rise in revenue and profits amid ?26bn bidding war


Donald Trump 'deal' with EU boss Jean-Claude Juncker averts trade war


MPs urge help with household debt and savings


Water companies slammed over shareholder payments

WPP has threatened to strip its former chief executive of unvested share options which could be worth up to €19m for breaching confidentiality undertakings.Sir Martin did not have a formal non-compete agreement with WPP when he left, and his lawyers have denied any wrongdoing by pursuing the takeover of MediaMonks.
See also:
Leave a comment
News
  • Latest
  • Read
  • Commented
Calendar Content
«    Октябрь 2018    »
ПнВтСрЧтПтСбВс
1234567
891011121314
15161718192021
22232425262728
293031