Lowe chief suspended over loss of Tesco account

Click to follow
The Independent Online

The head of a leading London advertising agency has been suspended indefinitely after claims that he met the chief of the rival agency that poached its biggest client soon after.

Garry Lace, the chief executive of Lowe London, is alleged to have held talks with the advertising doyen Sir Frank Lowe, whose new Red Brick Road agency pinched the £45m Tesco account days after its December launch.

An investigation by Lowe London's parent company, Interpublic Group, into claims made in the industry magazine Ad Age is expected to conclude by the end of the month. A statement from the company said: "Lowe Worldwide today confirmed that it has suspended Garry Lace on full pay, in order to pursue an internal investigation into certain matters that have come to the company's attention."

Sir Frank, 65, founded the Lowe Worldwide agency in 1981, picking up accounts from the likes of Unilever, Nestle and Johnson & Johnson before being swallowed by Interpublic nine years later. He retired in 2003 but stayed on as a consultant for a year under the moniker of chairman emeritus.

Late last year, he surprised the advertising industry by unveiling plans to return to work with a new agency, named after the path Dorothy chose not to follow in the 1939 MGM classic The Wizard of Oz.

The hefty Tesco contract and key Lowe personnel quickly followed Sir Frank along that Red Brick Road, including its chairman and main Tesco contact, Paul Weinberger. Relations between Interpublic and Sir Frank became increasingly fractious. Although Sir Frank's two-year non-compete clause expired last year, Interpublic believes he has "continuing fiduciary responsibilities to the company".

Interpublic submitted a claim for arbitration in New York, alleging that "Mr Lowe has begun a campaign to induce such executives and clients to leave the Lowe agency and join a rival firm".

Sir Frank hit back, saying in a statement: "If IPG does not withdraw its baseless claims, we may seek damages for defamation and tortious interference."

According to proxy filing with the US Securities and Exchange Commission, Sir Frank is entitled to annual payments of more than $500,000 (about £280,000) from Interpublic for the next 15 years under a special deferred benefit scheme.

In 2004, Mr Lace left his job as the chief executive of Grey London after a hoax e-mail anonymously sent to clients and industry executives reportedly claimed Mr Lace was poised to set up a rival rewards scheme to Air Miles, a Grey client. The assertions of the e-mail were denied but Mr Lace departed within six months.