• Home
• /
• Business

Carphone co-founder quits over disclosure breach

Ross, ranked 87^th in the Sunday Times 2008 Rich List with an estimated fortune of 873 million pounds ($1.3 billion), is one of Britain’s best-known businessmen and was chosen by London Mayor Boris Johnson in May to help organise the 2012 Olympics.

He also failed to disclose similar arrangements for his shares in bus and rail firm National Express, of which he is chairman, and two other companies of which he is a director, regulatory filings showed on Monday.

Shares in Carphone, which Ross jointly founded with Charles Dunstone in 1989, fell over 5 percent to a 5-1/2 year low of 87 pence on concerns Ross might have to sell his 19 percent stake in the business.

UK listing rules require that directors should disclose immediately if they have pledged shares against personal loans.

Carphone said Ross had struck his loan agreements between 2006 and 2008.

“The company hadn’t been aware of this until this time,” Dunstone told analysts on a conference call.

“As a result of that, David has tendered his resignation to the board.”

Ross could not immediately be reached for comment.

Britain Financial Services Authority declined to comment on whether it would be taking any action. The London mayor’s office and London Organising Committee of the Olympic Games (LOCOG) had no immediate comment.

Carphone said Ross had pledged 136.4 million shares against personal loans between 2006 and 2008. This was on top of around 41 million shares pledged against loans which he had previously disclosed.

It said Ross had notified the company that none of the loans were in default and that he had no current intention of selling his shares.

“In addition, he has given an undertaking to the board to facilitate an orderly market, where possible, for any potential future disposal of shares in the company,” Carphone said in a statement.

Self-storage group Big Yellow said Ross, who is a director of the company, had also pledged a holding of 11.46 million of its shares against personal loans.

National Express said he had pledged a holding of 3.01 million shares against personal borrowings, while marine safety group Cosalt said he had pledged a holding of 3.99 million shares for the same purposes.

At 1105 GMT, Carphone shares were down 4.6 percent at 88.75 pence. Big Yellow was down 4.6 percent at 202.5 pence, off a low of 200.5 pence. National Express was down 2.5 percent at 466.75 pence and Cosalt up 1.4 percent at 138.5 pence.

Big Yellow and Cosalt also said Ross had no intention of selling his holding, while National Express said he would attempt to ensure an orderly sale process if one were to occur.

Dunstone said he did not know why Ross had not declared his loan arrangements earlier and said the details of the loans were a personal matter.

“I think it was probably an oversight or a misunderstanding of what needs to be done,” he said. “It’s clearly a great personal sadness to me, having worked with David for such a long time, to lose him from the board.”

Carphone said that no other directors had undertaken similar loan arrangements.