Interpublic attacks Frank Lowe

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The global marketing and advertising giant Interpublic has started a legal action against one of its former directors, industry stalwart Sir Frank Lowe.

The group - which owns Lowe Worldwide, the advertising agency co-founded by Sir Frank - said it had started proceedings for "violation of contractual and fiduciary duties". The claims are being pursued at the American Arbitration Association in New York, and Interpublic is seeking what are understood to be substantial damages.

The action follows Sir Frank's recent recruitment of Paul Weinberger, the chairman of Lowe London, and, crucially, the loss of the Tesco account, worth around £6m a year.

Tesco is one of Britain's biggest advertisers and was Lowe's largest client in London by revenue. The supermarket chain has been with the agency for 16 years. (It was responsible for the "Every little helps" slogan.) Tesco will now go with Mr Weinberger to the as yet unnamed agency Sir Frank is setting up.

Sir Frank sold Lowe to Interpublic in 1990, spending over a decade with the group before retiring as head of Lowe Worldwide in 2003. He then acted as a consultant and, until the end of last year, was subject to non-competition clauses and an agreement not to solicit staff.

While that period is now up, Interpublic is understood to be unhappy with Sir Frank's actions because it continues to pay him a substantial retirement package.

The group said: "Frank Lowe sold his agency to Interpublic for tens of millions of dollars and subsequently received many times that amount in financial support and resources to build a global network, and recruit and compensate key talent."

Its claim stated that Sir Frank had "chosen to use contacts and proprietary knowledge to damage Lowe and Interpublic" and that it was seeking monetary compensation.

The loss of Tesco came at a bad time for Lowe, which has recently lost work from clients including HSBC and Unilever. It cut 29 staff last summer in a shake-up aimed at improving profitability.

Sir Frank was unavailable for comment.