After the unravelling of an accountancy scandal last week, M&C Saatchi has announced four significant board resignations.
In its latest statement, the company revealed the resignation of non-executive directors, Lord Dobbs, Sir Michael Peat and Lorna Tilbian, as well as executive director, Lord Saatchi.
This closely follows results of an independent review conducted by PwC, which revealed that M&C Saatchi would need to make adjustments of £11.6m due to accounting errors.
This independent review followed an internal accounting review of UK subsidiaries issued by the agency in August, which flagged up the financial issues at play.
KPMG was replaced by PwC forensic services to perform the independent review of the issues identified, and PwC identified items “more judgemental in nature” that brought the total proposed adjustment to £11.6m.
Following this news, shares in the agency plunged by 46%, and shares fell a further 6% following breaking news of the boardroom resignations.
Chairman Jeremy Sinclair said: “We have accepted the decision of these directors to resign.
“We are determined to restore the operational performance and profitability of the business and are already implementing all of the recommendations set out in the PwC report we announced last week.”
He added: “We had started a process to reconstruct our board with new Independent directors. This new board will have a mandate to conduct a full review of all aspects of our governance.”