Staff face axe in widening WPP Italy investigation

LONDON – WPP Group's investigation into its Italian operation is likely to claim several senior executives this week, according to reports, following the start of legal proceedings against Marco Benatti, the former head of WPP's Milan division.

The advertising group yesterday demanded an explanation of "irregular personal expenses" paid by WPP Italy-owned companies to several clients and media owners.

WPP has declined to discuss moves to remove senior staff in its Italian operations.

Directors of Fullsix, a WPP subsidiary that former country manager Benatti is trying to buy out, plan to ask for a full explanation of payments made to businessmen close to Benatti. The Italian owns 41% and WPP 26% of Fullsix.

The investigation into WPP's Italian operations by corporate investigators Kroll, hired by WPP chief executive Sir Martin Sorrell, has now widened to include WPP Italy's chairman Giovanni Bossi and several directors.

Kroll is seeking information from senior staff before any of them are removed.

Tension between Sorrell and Benatti began over the latter's financial interests in Mediaclub, which WPP acquired after Benatti introduced the media company to the group for a fee. Benatti has demanded €8.9m in additional commissions relating to Mediaclub, a figure which WPP says should be only €350,000.

Bossi is managing director of investment bank Ifis, which is believed to have dealt with Mediaclub, allegedly helping the media company reduce debts through a legal "factoring" deal.

Meanwhile, further details of a break-in at WPP's Milan offices over consecutive weekends in January emerged from sources close to the inquiry.

WPP filed a claim against Benatti at the High Court of Justice last month after Benatti was sacked by Sorrell on January 9. The claim accuses Benatti of breaching his consultancy agreement and his duties as a fiduciary, claims Benatti has denied.

Sorrell told BBC Radio Five Live: "Litigation in Italy has already commenced. We are suing him. Expect a lot of counter litigation in this process."

WPP's Italian arm brings in £143m a year, some 2% of group revenues.

Benatti has repeated his claim that Sir Martin has wrecked WPP Italy through his "brutal and unjustified behaviour".

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