Shares in the former National Freight Consortium crashed below the rights issue price, at which the company raised pounds 260m last December, after a trading statement which analysts took to be a thinly disguised profits warning.
Mr Sherlock, who was employed on a three-year rolling contract at pounds 255,000 a year, is still negotiating compensation terms.
Robbie Burns, a director who had previously been tipped for the top post, has decided to stay on at NFC despite announcing in May his intention of resigning at the end of next month. A company spokesman refused to say whether his decision was connected with Mr Sherlock's departure.
Until a new chief executive is found, James Watson, chairman, and Trevor Larman, finance director, will assume Mr Sherlock's responsibilities. Mr Watson said: 'This does not reflect any change from our strategic direction and plan, which is well founded.'
Analysts said the departure of Mr Sherlock was not a rejection of a wide-ranging programme of cost- cutting and management changes, implemented over the past 18 months. They said his aggressive management style was at odds with the culture of NFC.
The company emerged from government ownership in 1982 when its employees bought it out. In 1989 it gained a listing, with inclusion in the FT-SE 100.
Mr Sherlock joined NFC six months after quitting Bass, where he was believed to have fallen out with the chairman, Ian Prosser.
NFC, which has 33,000 staff, is perceived to be struggling harder than its smaller competitors to cope with the changes in the distribution and transport industry.
Since the one-for-four rights issue last December, profit forecasts have slipped from about pounds 130m this year to pounds 105m, and the share price has dropped. Shares closed yesterday 14.5p lower at 185.5p, below the rights issue price of 195p.
The company forecast profits for the nine months to July of pounds 76.6m, a 23 per cent increase on last year's result but a disappointment to the City, which had expected NFC to benefit from the improving economy.
Red pens were taken to forecasts after a warning that trading in Continental Europe had not recovered as expected and driver shortages in the US had reduced profits.
The figures will include a UK pensions credit of pounds 18.9m, the disclosure of which was one of the changes introduced by Mr Sherlock in the first quarter of the year.
It is understood that the move towards greater disclosure had contributed to the deteriorating relationship between Mr Sherlock and the rest of the board. NFC's figures have also started breaking down contributions both geographically and by business sector.
Mr Sherlock's departure is the latest upheaval in a turbulent year for NFC. The annual meeting in February descended into a row over whether the company was turning its back on its traditional values.
A former chairman, Sir Peter Thompson, took Mr Watson to task for failing to consult shareholders about the rights issue, which diluted their holding and threatened the privileged voting rights of employees.
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