Carphone Warehouse co-founder quits in shares scandal
Just what you don't need when you're a major high street retailer in a recession: the discovery that the owner of one fifth of the business is securing personal loans against it. Whoops.
David Ross holds just under 20% of all shares in Carphone Warehouse and, along with chief exec Charles Dunstone, is co-founder of the company. Ross has now has resigned as a director, after it was discovered he used 136 million of his 177 million shares as security against personal loans. Without telling anyone. That's generally considered to be bad form, not least because you risk undermining the performance and stability of the whole company, but stock exchange rules state a public announcement must be made.
As a director in another four major companies, including National Express, and as one of the men responsible for organising the 2012 Olympics, it'd be reasonable to assume that Ross is a shrewd businessman and knew exactly what he was doing. Apparently not. Dunstone is quoted by the BBC as saying it was "probably an oversight or a misunderstanding of what needed to be done".
Yes, that'll be it. It's all too easy to accidentally secure personal loans against shares worth tens of millions of pounds.We've all done it, haven't we? The stock market isn't so convinced by the claim - the company's share value has already dropped four per cent since the news broke.