Carphone co-founder quits in share scandal

 

Gallery

By Stuart Turton

Posted on 8 Dec 2008 at 13:55

David Ross, the co-founder of Carphone Warehouse, has resigned as a director of the company following a share scandal.

Ross used 136 million of his 177 million shares to guarantee personal loans between 2004 and 2008 without informing the company of his actions. The 136 million shares are estimated to be worth around £120 million.

Stock market rules dictate that any director using their shares in this way must inform the company immediately, so a statement can be issued to shareholders. However, Ross only admitted the guarantees yesterday.

Charles Dunstone, Carphone Warehouse's chief executive, says the board accepted the resignation with "great sadness" and attributed Ross's failure to disclose his actions as "an oversight or misunderstanding of what needed to be done."

Dunstone and Ross were school friends and built Carphone Warehouse together. Between them, the pair own 52% of the telecoms company.

The resignation follows rumours that Carphone Warehouse is looking to sell off its broadband arm, TalkTalk, for a reported £900m.