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.

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. ®

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