Scardino and Sorrell disclose loans to FSA

As the disclosures of share-secured loans taken out by various company directors was made before yesterday's deadline, Dame Marjorie Scardino and the advertising guru Sir Martin Sorrell were among the directors whose loans were revealed.

Sir Martin pledged a total of 7.9 million shares, currently worth around £31m and representing almost half of his total holding of 1.3 per cent of WPP, against various loans taken out between 2005 and November last year. However, he then released about 260,000 of the shares in December to fund a charity donation.

Dame Marjorie, between March 2006 and May 2008, pledged shares in exchange for loans from HSBC, and as of 22 January, had 216,668 shares representing just under 0.03 per cent of Pearson and worth around £1.4 m, tied up as collateral. This is just over one-third of her total holding in shares of the company she runs.

The executives join other City personalities including Icap's head Michael Spencer, Daily Mail & General Trust's chairman Viscount Rothermere and Frits Seegers, who runs Barclays' retail branch network, whose use of shareholdings as loan collateral has been disclosed in recent days.

The disclosures come in the wake of the resignation from several posts of David Ross, the co-founder of Carphone Warehouse, after he admitted he used his holding in the business to guarantee personal loans on commercial property without telling colleagues. When widespread confusion about the rules subsequently emerged, the FSA decreed an amnesty on such undeclared loans and gave companies until yesterday to reveal the transactions.

But one issue that may arise if the one-third fall in the FTSE 100 index over the past year continues is the need for banks to get top-ups on the loan collateral if the value of the securities pledged falls. This could prompt a new wave of more distressed share pledges. Indeed such loans work like a mortgage, where shares replace property. But shares are a lot more volatile than houses and banks and therefore often include so-called margin calls in the terms of the agreements.

So the grandees of corporate Britain may soon need to set aside more of their copious shareholdings as collateral for loans. Or sell the houses, boats, shares and other goodies they have spent them on.