Dooner demoted as Bell takes reins at Interpublic

LONDON - John Dooner has been dumped as Interpublic chairman and chief executive and shifted back to McCann-Erickson, as James Heekin, chairman and CEO of McCanns, has been ousted following the long-running financial scandal.

Following a board meeting today, it has been confirmed internally that Dooner is returning to head up McCann-Erickson, replacing Heekin at the agency he used to head before assuming the top job at the Interpublic Group of Companies.

Dooner is being replaced by David Bell, who was the head of True North until it was bought by Interpublic in 2001. Bell took the role of vice-chairman of Interpublic and was responsible for the division known as The Partnership, until the scandals of last year saw a shuffle of senior management.

Dooner was dumped at an Interpublic board this morning. At the same meeting, Heekin carried the blame for the financial troubles and was ousted from the company completely.

It was Heekin's McCann-Erickson that was at the centre of accounting discrepancies, which forced Interpublic to restate $181.3m (£115) in earnings. The scandal has already claimed the scalp of Sal LaGreca, chief financial officer of McCann-Erickson.

It led to wider claims of pressure from senior executives at Interpublic to improve the financial performance of the agency.

A lawsuit filed on behalf of Interpublic shareholders against the company and senior executives, including Dooner and chief financial officer Sean Orr, quoted an unnamed executive from McCann-Erickson's Colombian office, saying that there was increasing pressure from Interpublic bosses to meet budgets, "even if that required overstating reported revenues and understating reported expenses".

Dooner took on the CEO role at Interpublic two years ago and his reign has seen the company's share price plummet as details of accounting irregularities at McCann-Erickson emerged. Interpublic also faces questions over its debt level, following an acquisition binge in the late 1990s and early 2000s. It is in the process of selling research company NFO Worldgroup, although it is likely to get far less than it paid for the company.

Prior to taking the CEO role, Dooner had been chief operating officer for six months. Before that, he led McCann-Erickson for five years. Last month, McCann-Erickson was replaced on the account for Coke Classic by Berlin Cameron/Red Cell, part of rival WPP Group. Dooner had personally worked on the Coke account.

If you have an opinion on this or any other issue raised on Brand Republic, join the debate in the Forum here.