Carphone Warehouse Co-founder and Chief Quits Unexpectedly
David Ross, the Co-founder and Deputy Chairman of Carphone Warehouse, has quit is position at the independent mobile retailer when he failed to disclose that he pledged much of his hold in the company as security on his own loans. He used 15% of the equity in the company, which is 136 million shares, as collateral for loans during the last 2 years, failing to notify the board.
Carphone Warehouse stressed that he has not planned to sell his shares, and his loans weren’t default. According to exchange rules for stocks, if a director wants to use his company shares for a security on personal loans, then the company has to declare an official statement. The shares of Carphone Warehouse dropped 5.4% in London during morning trading.
Also on Monday, Big Yellow Group, which is where Ross is a director, said that they were informed by him that he pledged 11.4 million shares as collateral for loans. They also said that Ross told them he was not planning to sell any of his company shares. More than 3 million shares in National Express and nearly 4 million shares in Cosalt have been reported being used as security for loans as well. The Financial Services Authority hasn’t given a comment yet on if they will probe into Ross’s activities.
Ross was the Chief Operating Officer for Carphone Warehouse from 1999 to 2003 and is the second biggest shareholder. He is also on the organizing committee of the board for the Olympics in 2012. The Greater London Authority will not confirm if he will continue in his role for the Olympics.
Visit www.carphonewarehouse.com for more information on the company.
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