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The World: WPP's Chinese partner elopes with Omnicom.(Citic Guoan)

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| July 07, 2006 | COPYRIGHT 2006 Haymarket Business Publications Ltd. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan.  All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)Copyright

Following a row with Sir Martin Sorrell, Citic Guoan's Yan Gang has switched his agency's allegiance.

In one of the most bitter salvos from a corporate executive in recent years, Yan Gang, the chairman of the Chinese advertising agency Citic Guoan, said of Sir Martin Sorrell earlier this month: '(He) had absolutely no manners, no upbringing and no culture.'

Yan was talking to journalists assembled in Beijing for the announcement that Citic Guoan would be ending its 14-year partnership with Grey. When Sorrell's WPP acquired Grey Global Group last year, it inherited the joint venture between Grey and Citic Guoan. Just 15 months later, the Chinese agency has decided to build a future with WPP's rival Omnicom as its strategic partner.

The deal - a real coup for Omnicom - will see DDB China and Citic's Beijing Guoan Advertising merge to form DDB Guoan Communications Beijing, with Yan named the chairman of the new advertising agency.

As part of the huge conglomerate China Citic Group, which had total assets worth pounds 60 billion in 2004, DDB China will double in size overnight, according to Omnicom sources. It will gain a valuable strategic partnership with one of the most influential business entities in a market that both Omnicom and WPP see as being of key importance.

Questions hover over why Yan and WPP split, particularly as Yan continues to allude to wrongdoing by WPP. A WPP spokesman says issues between Sorrell and Yan came to the surface in March this year when the two met in London. A disagreement between the two parties led to calls for an audit, with Yan pushing for a local Chinese company to undertake the exercise. WPP, however, insisted on appointing internationally recognised auditors from Ernst & Young.

WPP says the audit revealed that allegations made by Yan are unfounded.

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