Carphone co-founder quits over secret share pledge
Borrowed money against share stake
The co-founder of Carphone Warehouse, David Ross, has resigned, after failing to notify the board that he used his shares in the company to underwrite personal loans.
The company discovered yesterday that Ross had used a stake of 136.4 million shares in the company to secure personal loans. He has 160 million in total, a substantial proportion of CPW's 914 million outstanding shares. Ross has told the company that none of these loans are in default, but he has resigned from his position as a board director and deputy chairman.
The deals were done between 2004 and 2006. Ross told the company he had no current intentions to sell the stock and promised to "facilitate an orderly market, were possible, for any future disposal".
Carphone Warehouse said in a statement: "No other Director of the Company has granted security over or entered into any financial instruments relating to any of their holdings of ordinary shares in the Company."
Shares in the firm are down 4.5 per cent against a market which is up over five per cent.
Ross, a chartered accountant, was appointed in May to run the 2012 Olympics on behalf of Mayor of London Boris Johnson. The role is unpaid. ®
£100 million in borrowing?
What was he doing, paying off an Ocean Finance loan?
Did you hear about the dodgy accountant ?
He's now got phorm.
Who wants to know (etc)
Man to accountant: What's two plus two?
Accountant: Who wants to know?
Man to accountant: A very rich man
Accountant: What would you like it to be?
According to reports elsewhere, Mr Ross is a director of various companies, not just the lovely CPW, and he's had the same "misunderstanding" at several of them, ie forgetting his director's obligation to declare that he has potentially lost control over his share of the company, by using the shares as security for other bits of financial jiggerypokery.
I hope the accountants professional body are looking to have him struck off. Nothing less would suffice as punishment for this ghastly misdeed, which besmirches the reputation of all the proper qualified honest accountants out there (all three of them).
Boris really knows how to pick his mates, doesn't he.