Ross share sale raises £75m to pay off loans

David Ross, the former deputy chairman of Carphone Warehouse, on Thursday raised almost £75m by selling shares in the mobile phone retailer and Big Yellow, the storage company.

People close to Mr Ross said he was selling the shares so as to pay down personal loans. He declined to comment.

In December Mr Ross quit the board of Carphone Warehouse after belatedly disclosing that he had pledged shares in the company as security against personal loans. Mr Ross’ main private bank is JPMorgan, according to his friends.

As well as Carphone, Mr Ross pledged shares in Big Yellow, National Express, the bus and train operator, and Cosalt, the marine safety equipment maker.

Following disclosure of the collateral arrangements, some of which date back to 2006, Mr Ross relinquished his roles of non-executive director at Big Yellow, chairman of Nat­ional Express and chairman of Cosalt.

Taking advantage of the stock market rally of the past three months, Mr Ross, Carphone’s second largest shareholder, yesterday sold 2.6 per cent of his 19.4 per cent stake in the company at 160p a share, raising £38.4m. He also sold all of his 9 per cent stake in Big Yellow at 315p a share, raising £36.2m.

Mr Ross, who helped Charles Dunstone, Carphone’s chief executive, to build up the company into Europe’s largest mobile phone retailer, wants to remain a long-term shareholder in Carphone Warehouse.

Carphone’s shares closed down 1.8 per cent at 168p. Big Yellow’s shares closed down 7.4 per cent at 313p.

In December, Mr Ross admitted to an “apparent but unintentional” breach of stock market disclosure rules relating to collateral arrangements.

However, in January, it emerged that Mr Ross would not face action by regulators. The Financial Services Authority said then that its rules required directors of a company to disclose any use by them of its shares as security.

But the FSA said it would not take enforcement action against directors that had not made the necessary disclosures because of uncertainty about application of the rules.

Mr Ross’ notification of his collateral arrangements to Carphone was quickly followed by similar disclosures by directors of other companies who had pledged shares as security.

People close to Mr Ross said his selling of shares in Carphone and Big Yellow had nothing to do with his commercial property interests, which have come under pressure in the downturn.

Mr Ross had a Gilbraltar-based commercial property joint venture with Morgan Stanley called Kandahar Real Estate, but he has bought the investment bank out for a nominal sum.

Accounts filed this month for Kandahar Group Limited, a British subsidiary of Kandahar Real Estate that funds several UK property interests, show that auditors have highlighted uncertainty about the company’s ability to continue as a going concern.

Directors of Kandahar Group expect it to be in breach of covenants on its £247m loan facility with HBOS if the company’s property portfolio is valued next month.

However, the directors hope to finalise a debt restructuring agreement with HBOS by December.