PHILIP LADER, WPP’s non-executive chairman, yesterday waded in to reassure investors after alleged fraudulent activity at the advertising group’s Italian operations.
Mr Lader said that the board was “taking every step to ensure a thorough investigation”.
His comments come amid fears that the departure of Marco Benatti, the head of WPP’s lucrative Italian business, and the nature of the investigation could raise concerns among clients.
Mr Lader said that the procedure in Italy was “indicative of the transparency” encouraged at WPP by Sir Martin Sorrel, the chief executive. “The board was informed immediately about the investigation,” he said.
Signor Benatti left his post last month after allegations of fraud. Kroll, the forensic accountants, and Deloitte, the consultants, were hired to carry out an investigation into the operations.
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It is also understood that Kroll has widened its investigation to include Signor Benatti’s brother, Vittorio Benatti.
Mr Lader also addressed recent speculation that investors were concerned about Sir Martin’s dominance.
He said: “We have a rigorous succession process in which we review a wide variety of successors. The board has routinely given in-depth attention of potential successors for a number of positions at WPP, including that of the chief executive.
“The list always changes, but it is important the board is aware of potential successors,” he said.
This weekend it also emerged that WPP and the publishing magnate Richard Desmond’s Northern & Shell have filed lawsuits against each other in a dispute over the launch in the United States of Mr Desmond’s OK! magazine.
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A a WPP spokesman said: “We sued him for $10 million (£5.7 million) last week for nonpayment and he filed a countersuit on Friday.”
Last week Marco Benatti filed a lawsuit in Italy against WPP over his “irregular dismissal” from the company.
Signor Benatti also reserved the right to take action against Sir Martin, “due to the immense damage he has personally created by his repeated defamatory statements”.
The move came after WPP had filed a claim in the High Court in London against Signor Benatti.
WPP is believed to be claiming more than $25 million (£14 million) from its former employee. He was understood to have spoken to his lawyers about a possible counter-claim.
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It is understood that WPP is also looking at the dealings of a handful of individuals both inside and outside the firm. The focus of the inquiry is believed to be on alleged irregular payments to WPP clients.
A spokesman for WPP said last week: “That facts will speak for themselves and louder than any rhetoric which attempts to divert attention from the real issue.”