M&C Saatchi shares slide after founder and three directors quit

Lord Maurice Saatchi

The troubles at Golden Square have moved into a new phase as Maurice Saatchi, 73, steps down from the board of M&C Saatchi along with the agency group's three non-executive directors.

Insiders told The Telegraph that the walkout was triggered by the refusal of M&C Saatchi co-founders Jeremy Sinclair, Bill Muirhead and David Kershaw to accept new supervision or a rapid investigation of accounting practices.

Saatchi's departure follows a second profits warning at the firm last week.

Saatchi, an executive director at the AIM-listed firm, quit the company on Tuesday evening and was joined by three non-executive directors, Lord Dobbs, Michael Peat and Lorna Tilbian, all of which have stepped down with immediate effect. "We are determined to restore the operational performance and profitability of the business".

The company also revealed a £11.6m hole in its earnings last week.

The original Saatchi business, led by the Saatchi brothers, made a name for itself with its "Labour isn't working" campaign poster for Margaret Thatcher showing a queue of people snaking out from an unemployment office and disappearing into the distance.

M&C Saatchi said it would restructure its United Kingdom business in a bid to improve performance. David Kershaw, the group's chief executive, admitted the numbers "make for very hard reading - both for us as a management team and for all of our stakeholders".

Sinclair said the company had started a process to reconstruct its board with new independent directors, who "will have a mandate to conduct a full review of all aspects of our governance".

Their exits come just a week after the firm warned over profits after being hit by higher costs and a weak performance in the final quarter.



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