RECKITT Benckiser, the FTSE-listed consumer giant, could face a probe by the City watchdog after failing to alert the stock exchange that chief executive Rakesh Kapoor had pledged £8.7m worth of shares against a personal loan.
The company behind household products such as Strepsil and Gaviscon admitted yesterday that in 2010 Kapoor had put up 203,433 shares as a loan made by Bank of America Merrill Lynch.
Kapoor, who was head of category development at the time, made a further three transactions so that today 239,000 shares out of his total shareholding of 282,000 are set against the bank loan. This breaches the Financial Services’ Model Code, which require companies to disclose their directors’ share dealings.
Reckitt yesterday said it had discovered the breach after a “periodical review” of directors’ past share transactions and after following advice by the FSA, “had made a retrospective disclosure”.
A source close to the company said the breach “was an oversight on behalf of the firm” and that Kapoor, who took over as chief executive last year, had told the board about the loan two years ago. The FSA said it is looking into the claim but would not comment on individual cases.