The AA's share price slumped more than 15 per cent this afternoon, after revealing it had fired executive chairman Bob Mackenzie for gross misconduct.
A spokeswoman for the company said he had been removed with immediate effect on a "personal conduct-related matter".
City A.M. understands the reason for his exit is subject to legal action, but is not thought to have any bearing on the company itself. Analysts at Liberum appear to agree, sending a note out following the statement saying: "We do not believe that it is fraud related."
However, the news has sent AA's share price through the floor this afternoon, dropping as low as 199.5p before beginning a slow recovery.
Mackenzie was central to a sophisticated management buy-in deal three years ago, which led to the firm being floated on the London Stock Exchange. The arrangement was backed by big City names such as Aviva, BlackRock, Legal & General and legendary stock-picker Neil Woodford.
His role has been split in two with senior independent director John Leach appointed as chairman, while former Uber Europe boss and Expedia founder Simon Breakwell has been appointed acting chief executive. Both men have been with the business since 2014.
Martin Clarke continues as the chief financial officer.
The roadside recovery company said it had already begun the process of splitting the combined roles of executive chairman as it neared the end of a transformation programme.
AA's statement included a pre-close update which said the business had experienced "a robust performance in the first half".
But it warned that it had been hurt by "the effect of erratic work load patterns on an inherently fixed cost base. This was especially true in June and July which saw significant spikes in demand".
The motor club will also be affected by a "one-off, accelerated cost relating to a profit sharing arrangement with a third party relating to certain products which they underwrite, such as breakdown repair cover".
In addition, we have seen a significant growth in the number of insurance policies underwritten by our underwriting business on behalf of our broker. Our accounting policies relating to revenue recognition mean that this intra-group revenue is deferred over the life of the policy with a corresponding impact on profits in the year in which that policy is written.
"We now expect the full year performance to be broadly in line with that of the last financial year," the statement said.
Breakwell "will be in a position to provide an update on our plans" when the first half is formally announced on 26 September.
"We remain confident in the resilience and long-term prospects of the AA".
Prior to heading up the AA, Mackenzie was chairman and chief executive of National Car Parks and its roadside recovery subsidiary Green Flag.
He was also chief executive of the now-defunct Sea Containers, has chaired Northgate and PHS Group and held senior executive board appointments with BET, Storehouse and Hanson.