UK telecoms firm sues chief executive

PNC's stock has fallen from over £4 to 7.5p

The company behind the KJC mobile phone shops has said it is suing its former chief executive for up to £400,000.

News of the legal action unsettled investors and sent PNC Telecom's shares 24% lower, reducing its value to below £3.5m.

PNC has accused Darren Ridge of paying wages to two people who never worked for the company and of carrying out transactions involving members of his family without the board of directors' approval.

Mr Ridge has denied any wrongdoing and has countersued for wrongful dismissal.

"We are going to vehemently defend any allegation," said Barry Mordsley of Salans, the law firm representing Mr Ridge.

Difficult year

PNC, which operates 54 KJC shops in Hampshire as well as a fixed-line telecoms firm, has issued two profit warnings since Mr Ridge became chief executive 16 months ago.

By the time of the second warning, on 31 March, Mr Ridge was no longer in charge on a day-to-day basis and he was already on his way out of the company, PNC said.

It was after this second warning that the board was made aware that Mr Ridge "may have committed acts of misconduct", PNC said.

PNC said Mr Ridge resigned "without notice" on 21 June.

His resignation came three days prior to a scheduled disciplinary hearing, PNC said.

On Monday, the company's stock was trading at 7.5p.

At its peak, during the tech boom, the stock stood at 410p.