London-headquartered WPP Group has launched a fraud inquiry into events underlying WPP Italia's £14 million ($24.83m; €20.47m) acquisition three years ago of local media buying firm Mediaclub .
The agency giant has hired a group of investigatory heavyweights led by US forensic accounting specialist Kroll to probe the circumstances surrounding the acquisition. WPP auditor Deloitte and three Italian law firms respectively specialising in contract, corporate and criminal law are also involved.
The spotlight is focused on WPP's former country manager Marco Benatti, whose operatic exit took place earlier this month following "differences" with WPP ceo Sir Martin Sorrell [WAMN: 18-Jan-06].
It seems that Benatti "introduced" WPP to Mediaclub, this act of kindness earning him an introductory commission of £140,000 - a common and wholly legitimate practice the world over.
But Sir Martin - himself an accountant of no mean acuity - felt the lobes of his ears begin to tingle when Benatti informed him some while later that an earn-out payment to Mediaclub of €8.9m was due. Again, a normal element in many acquisition deals.
With one small difference: at €8.3m the sum requested was nearly fifteen times higher than WPP's own estimate.
According to reports, suspicious souls within the WPP redoubt worry that Mediaclub's owner might in fact be ... a Mr M Benatti. A possibility that has also sparked a spate of questions about certain other deals in Switzerland, Scotland and Madeira.
Data sourced from MediaGuardian.co.uk; additional content by WARC staff