NEW YORK: Miles Nadal, the founder and former chief executive of MDC Partners, owes an additional $12.7 million to the holding company in the wake of an investigation into his expenses.
Two weeks ago, Nadal stepped down as the chief of MDC Partners, which owns PR firms across the globe including Crispin Porter & Bogusky and Anomaly, and had already paid back $8.6 million amid an inquiry by the Securities and Exchange Commission. The holding company has majority stakes in Kwittken, Allison+Partners, Hunter Public Relations, and others.
The investigation into questionable expenses, including travel and medical expenditures, dates back to October and encompasses MDC’s accounting practices and third-party trading.
On Thursday night, David Doft, CFO of MDC, told analysts during a second-quarter earnings call that Nadal owes an additional $12.7 million, bringing the total to $21.4 million.
Nadal will not be eligible for any compensation payments or severance upon retirement.
MDC also said it has wrapped up a deal to buy the 49% of 72andSunny that it does not already own.
Nadal, who founded MDC in 1980, was succeeded as chief executive by Scott Kauffman, who had served as presiding director on the company’s board of directors.
MDC reported overall organic revenue growth of 8.3% to $336.6 million in the second quarter. For the first six months of the year, revenue was up 7.8% organically to $638.8 million. It saw an operating profit of $44.5 million, up 52.9% versus the same period of last year.
For the first six months of the year, the holding company’s net loss was $2.5 million, while operating profit was $49.7 million, up 22.1% on last year.
MDC’s Strategic Marketing Services unit, which contains its PR agencies, reported revenue of $270.1 million in the second quarter of 2015, representing 11.5% organic growth over last year. For the first six months of the year, the group achieved 10.1% organic growth on revenue of $510.5 million.
Doft said in a statement that the company’s performance for the quarter was "strong and consistent with our expectations."
This story originally appeared on Campaign UK.