Second Chinese director to quit board of WPP Group

(c) Sky News 2019: <a href="http://news.sky.com/story/second-chinese-director-to-quit-board-of-wpp-group-11674865">Second Chinese director to quit board of WPP Group</a>
 

WPP Group has begun approaching senior Chinese business figures about joining its board, as its last-remaining director from the world's second-largest economy prepares to step down after nearly nine years.

Sky News has learnt that Ruigang Li, founder of the prolific media and entertainment investor China Media Capital, has told colleagues that he will not stand for re-election at the marketing services giant's next annual meeting in June.

He has been on the board of WPP since October 2010, meaning he would no longer be deemed independent under corporate governance guidelines after the autumn of this year.

Mr Li's departure from the board will come less than a year after Hugo Shong, WPP's other Chinese director, resigned.

Sources said the company, which is being reshaped by Mark Read, its new chief executive, was in talks with several prominent Chinese businesspeople about joining its board but that it had not "committed" to appointing someone from the country as a non-executive director.

China ranks as WPP's fourth-largest market by revenues, behind the US, UK and Spain, and was at the forefront of efforts of Mr Read's predecessor, Sir Martin Sorrell, to transform the company into the world's biggest marketing services provider.

The group, whose principal rivals are headquartered in the US and France, appears to have cooled on the prospect of a deal that would have seen a major Chinese technology company buy a stake in WPP's operations in the country.

Sky News revealed last summer that the FTSE 100 company was in talks with Alibaba Group and Tencent Holdings about a transaction that could have raised hundreds of millions of pounds for WPP.

Insiders said there had been little progress in recent months towards a deal, in which Mr Li's CMC was also a potential participant.

Sir Martin has spurned few opportunities since leaving WPP amid acrimonious circumstances last year to question the company's strategy.

When Mr Shong resigned from its board, Sir Martin said he was "saddened and disturbed" by the move "at a time when WPP is trying to develop and reposition its business in China".

WPP insisted at the time that while it was disappointed by Mr Shong's exit, it was "privileged to have Ruigang Li amongst its non-executive talent".

Sir Martin's new venture S4 Capital has clashed with WPP over the acquisition targets he has pursued and remuneration-related issues relating to his departure last year.

This month, WPP disclosed that its former chief was receiving shares worth about £2m after receiving legal advice which concluded that there was no basis for withholding the shares.

WPP declined to comment on Monday.