Fresh blow to WPP over Aegis claim

Sir Martin Sorrell, the chief executive of ad giant WPP, is facing a fresh headache following a French court ruling that will oblige him to release documents relating to a fierce row over client-poaching that involves Aegis, a media-buying firm.

  • E-Mail
By  Mark Kleinman Published  February 26, 2006

Sir Martin Sorrell, the chief executive of ad giant WPP, is facing a fresh headache following a French court ruling that will oblige him to release documents relating to a fierce row over client-poaching that involves Aegis, a media-buying firm. Sorrell, who is already at the centre of a legal dispute with the former head of WPP’s Italian operations, was informed of the decision by the French Supreme Court last week. Sorrell's marketing group owns a 20% stake in KR Media, which was set up by two former Aegis executives in 2004. Bruno Kemoun and Eryck Rebbouh had been accused by Aegis of illegally poaching clients to take to their new agency. Aegis is claiming US$40 million in compensation Despite an initial victory for Sorrell just over a year ago, the latest decision means key documents and data will have to be released to Aegis. The content of the documents is not known. The latest twist to the long-running legal battle adds to the tension between Sorrell and Robert Lerwill, his opposite number at Aegis. Last year, WPP and Hellman & Friedman, the American private-equity firm, considered a bid for Aegis that would have led to Sorrell taking control of Synovate, its market-research arm. Sorrell has said recently that he remains interested in such a deal. But the WPP boss’s biggest priority is controlling the fall-out from the dismissal of Marco Benatti, the group’s country manager in Italy, who left WPP on January 9. The investigation by WPP into Benatti’s business affairs, which is being led by Kroll, the corporate investigator, has now widened to include a further two suppliers to WPP with which Benatti or his associates are alleged to have had links. Sources close to the investigation said recently that Kroll was looking into the ownership structure of a television production company called BRW, which is understood to have produced many of the commercials commissioned by WPP’s Italian operations. Enquiries by Kroll have suggested that BRW is 38% owned by Realsouth Investments, which is co-owned by Banca Arner, a bank where Vittorio Benatti, Marco’s brother, is thought to have held a senior role. Sources said it could be several months before Kroll and the three law firms enlisted by WPP give their final reports. Marco Benatti is also counter-suing WPP and has threatened to bring a personal action against Sorrell himself.

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code