Benatti Bites Back As WPP War In Italy Heats Up

The war of words between WPP Group and its fired country manager, Marco Benatti, escalated last week as he filed suit against the U.K. company and its Milan-based operations, alleging unfair dismissal and damage resulting from media reports. In a dispute that’s becoming highly personal, Benatti took aim at WPP CEO Martin Sorrell, releasing a statement saying he reserves the right “to extend proceedings against [Sorrell] as [an] individual person due to the immense damage he has personally created by his repeated defamatory statements.”

Benatti, who was dismissed Jan. 9 as WPP commenced a fraud investigation into his activities as a company consultant, could not be reached for further comment. Sources said it is not clear what legal remedy or financial damages Benatti is seeking.

WPP sued Benatti in London on Jan. 11, seeking unspecified damages as the result of his breach of terms as expressed and “implied” in his consultancy agreement with the company. The holding company is also investigating him for fraud, and setting up competitive operations. A WPP spokesman responded to Benatti’s suit: “The facts will speak for themselves and louder than any rhetoric that attempts to divert attention from the real issues.”

There were also developments on another front where Benatti and Sorrell are squaring off: FullSix, an Italian marketing service firm jointly controlled by WPP and BluGroup (an investment firm of Benatti’s), which is the object of a takeover bid by Benatti. Last week, after WPP increased its FullSix stake to nearly 30 percent, BluGroup said it hiked its stake to just under 43 percent, after a group of FullSix managers exercised share options and sold that block to Benatti. It’s not known if two FullSix board members who are also WPP executives—chairman Marco Girelli, who oversees WPP’s GroupM unit in Italy, and Carlo Maffei, chief financial officer at JWT in Italy—sold their shares.

WPP also went public with a possible new twist in the investigation into two alleged break-ins at WPP’s Milan offices on the weekends of Jan. 14 and Jan. 21, which focused on Benatti’s fifth-floor offices. In a statement, Benatti contended WPP never reported the incidents to police. Other sources argue that Kroll, the corporate investigations firm brought in after Benatti’s firing, called police after encountering guards from Mondialpol, a security firm hired by Benatti. On Feb. 7, Benatti filed a complaint with police demanding an investigation into the events, to which a WPP spokesman responded: “Mr. Benatti should clarify and explain the relationship and links he has and has had in the past with Mr. Claudio Noziglia, today in charge of Mondialpol.”

Noziglia could not be reached for comment; Mondialpol said its managing director, Fabio Mura, was out of the office and not reachable. Sources said Noziglia was a business partner of Benatti’s in the late ’90s, possibly at CIA, the media operations later sold to WPP, and that the two remain friends.

As those new details are emerging, WPP is preparing to dismiss several others with ties to Benatti, perhaps as early as this week, sources said. Those senior managers are said to be involved with media buying at WPP operating units in Italy. WPP has also been in contact with six Italian clients about Benatti associates in their organization who are now part of WPP’s investigation.

WPP’s firing of Benatti came after the third-stage earn-out in December from WPP’s acquisition of Mediaclub, when Benatti demanded an earn-out of thirty times larger than what the U.K. company thought he was owed, sources said, leading WPP to believe he may have had a controlling interest in Mediaclub. Sources close to Benatti dispute that, saying he acquired a small interest in Mediaclub through an investment in a fund with a stake in the company.