The shares sank a further 8p to 138p yesterday and 7 million of them changed hands as investors expressed their dismay at the course of events, which the City fears could encourage Maurice Saatchi into further attempts to undermine the management and punish the shareholders for their treatment of him.
The company is still struggling to play down the dispute in public, appealing instead to the practical common sense of clients and staff, while continuing to portray Maurice Saatchi behind the scenes as a maverick who had become a liability, consistentl y promoting his own personal interests at the expense of colleagues and shareholders alike.
Specifically, it believes his diatribe ignores the contribution of the shareholders who financed the growth of the company since it went public in 1982, and shored up the business during the crisis years, culminating in 1992 when it lost almost £600m.
The shareholders who led the campaign to remove Mr Saatchi speak directly for about 30 per cent of the shares, but were supported by almost all the large shareholders, accounting for 70-80 per cent of the equity, consulted by the board in the last few weeks before the crucial vote on 15 December.
Contrary to general impression, the dissidents were also long-standing shareholders who had seen the orginal value of their shares reduced by 98 per cent as a result of the restructuring in 1992 and the rights issue in 1993.
Mr Saatchi, by contrast, has little more than 0.5 per cent of the shares. His brother Charles, who left the board two years ago, holds a similar number.
Maurice Saatchi is also accused of consistently undermining the chief executives, including Robert Louis-Dreyfus, who resigned in 1992 and especially his successor, Charles Scott, who was brought in as finance director to rescue the company and took overas chief executive from Mr Louis-Dreyfus.
The company now accepts that there is nothing to prevent Maurice Saatchi from setting up in competition with his old company or poaching clients.
But it does hold two strong bargaining cards with the former chairman, the terms of his compensation for loss of office, and non-competition and non-solicitation clauses signed by other executives which would make it difficult for him to poach them in the near future.
Maurice Saatchi has 30 months of his revised three year contract still to run at a salary of £200,000, which should entitle him to a £500,000 pay-off.Reuse content