Sparks fly as Saatchi dispute erupts again
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Financial Correspondent
A bitter row between Maurice Saatchi and his former firm, now called Cordiant, erupted anew yesterday when Mr Saatchi accused the ad agency of turning a Department of Trade and Industry insider-dealing probe into "an attack upon myself".
The Cordiant spokesman whom Mr Saatchi named in his statement yesterday, Alex Sandberg, immediately reacted in kind, accusing Mr Saatchi of "paranoia". When asked whether he had broken the story to journalists of the inquiry into trading of Cordiant shares, he responded: "I did not leak."
In a sharply worded statement, Mr Saatchi also accused Cordiant of breaching a legal truce which the firm, formerly called Saatchi & Saatchi, reached in May with Maurice's new company, M&C Saatchi, established by Maurice and his brother Charles. Yesterday he threatened to tear up the settlement.
The legal deal came four months after Mr Saatchi was forced out following a boardroom row over his pay. The anti-Maurice campaign had been organised by David Herro, manager of a US institutional investment fund.
During that time the Saatchis had wooed away two Cordiant clients, British Airways, worth an estimated pounds 80m a year, and Dixons, worth pounds 40m a year.
Cordiant paid the Saatchi brothers' legal costs of pounds 1m in exchange for an undertaking that M&C Saat chi would not try to poach any Cordiant clients or staff until the end of this year.
In his statement yesterday, Mr Saatchi said: "I am considering whether I am any longer bound by the moratorium by which I had agreed not to approach their clients or staff."
Over the weekend it emerged that the DTI was carrying out an inquiry into all share dealings in Cordiant during an eight-week period from December 1994 to January 1995. In that time, the Saatchi brothers sold their remaining stakes in the firm they founded.
The investigation by the two DTI inspectors will include the sale by the brothers on 3 January of their remaining stake, worth pounds 2.5m.
In his statement, prepared with the help of his own PR adviser, Sir Tim Bell, Mr Saatchi said: "In the most public business resignation of recent years I published a letter on 3 January stating that I was severing all my ties with Saatchi & Saatchi Company plc.
"After publication of that letter I sold my remaining shares in that company. I cannot believe that there is anyone who would have expected me to continue holding shares in a company which, against the written wishes of its major clients and key executives, had sacked me as its chairman, removed me from the board, and announced the removal of my name from the company. Wild horses could not have prevented me from selling my shares after that announcement.
"Nothing would have persuaded me to stay as a shareholder in a company controlled by Mr Herro. How anyone could have expected me to do otherwise is beyond my comprehension. The current reality of Cordiant plc is sadly as I had forecast.
"Cordiant has sought to turn this DTI investigation into an attack on myself via press briefings by the company's PR representative, Mr Sandberg."
Alex Sandberg, who runs his own City PR agency, College Hill, responded last night: "This is absolute nonsense. As a representative of Cordiant I have responded to a number of phone calls and have consistently read the company's statement, which was I believe written in consultation with the DTI."
Mr Sandberg added: "There have been no press briefings from my point of view or from Cordiant's. This matter is in the hands of the inspectors appointed by the Secretary of State. Whatever questions have been asked of me I have responded to by referring back to that statement.
"So to suggest that there have been press briefings by me smacks of paranoia."
"Cordiant has sought to turn this DTI investigation into an attack on myself via press briefing by the company's PR representative Mr Sandberg." - Maurice Saatchi
"Whatever questions have been asked of me, I have responded by referring back to the company's statement, so to suggest that there have been press briefings by me smacks of paranoia." - Alex Sandberg
Shares on the move
3 January: Maurice and Charles sell 1.8 million shares at 138p, worth pounds 2.5m. Maurice announces he is cutting links with Cordiant.
9 January: Three senior Saatchi executives defect to Maurice's new firm. They resign at midday. The Stock Exchange is informed four hours later, during which time 7 million shares are traded and the price falls 10 per cent to 112p.
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