Paris-headquartered Havas, the globe's sixth largest agency holding company (by 2002 billings) on Wednesday issued an emphatic denial that its auditors had refused to sign off its accounts, thereby precipitating the abrupt departure of the chairman/coo of its Euro RSCG advertising network, Bob Schmetterer.

Rumours to this effect swept Paris yesterday, driving down Havas shares by ten per cent at one stage. Chief executive Alain de Pouzilhac immediately demanded an official investigation into the source of the stories, releasing a statement Wednesday afternoon …

"Havas … formally denies the unfounded rumours that circulated in the financial markets this morning regarding the alleged accounting irregularities. Havas has called on the French financial regulator, the Autorite des Marches Financiers, to investigate. As a result the group has today requested that the AMF immediately launch an investigation into possible manipulation of the Havas share price."

As to the ousting of Schmetterer -- or 'retirement', as Havas prefers it -- the veteran adman was described by de Pouzilhac as a "man of vision". He will be replaced by "a man of action", the former ceo of McCann-Erickson WorldGroup, James R Heekin, who himself fell on his sword [WAMN: 26-Sep-03] after accounting problems at the Interpublic unit.

Most analysts believe the real reason behind the management upheaval is the widening gap between Havas and its five main global competitors: Interpublic, Omnicom, WPP, Publicis and Dentsu. All of whom have opened up clear blue water between themeselves and Havas in the winning of major accounts beyond their home marketplaces.

As an anonymous Havas insider put it: "When you are not doing very well radical action is needed."

Data sourced from: Financial Times and BrandRepublic (UK); additional content by WARC staff