WPP CEO Sir Martin Sorrell is under investigation by the board.

WPP plc (WPP) on Wednesday, April 4, said it had begun an independent investigation into its CEO Sir Martin Sorrell, after reports of personal misconduct and inappropriate use of company funds.

WPP shares fell 3% in the first minutes of trading, changing hands at 1,084 pence, extending a more 36% decline over the past year.

The world's largest advertising group said that the board has appointed an independent counsel to counsel to conduct an investigation in response to an allegation of personal misconduct against Sorrell.

"The allegations do not involve amounts which are material to WPP," the company said.

The Wall Street Journal on Tuesday had originally reported the investigation, with people familiar saying the board was looking into whether Sorrell misused company assets.

Sorrell in a statement denied the claims. "I reject the allegation unreservedly but recognize that the company has to investigate it. I understand that this process will be completed shortly. Obviously, I shall play no part in the management of the investigation under way," he said.

WPP is a sprawling advertising group, with creative agencies such as J. Walter Thompson and Young & Rubica, clients include Ford Motor Co. (F - Get Report) , Unilever NV (UL) and Nestle SA (NSRGY) .

The investigation comes at as awkward time for WPP, shares have fallen 16.67% since the beginning of the year, after it reported after the company in March posted its weakest full-year sales since the financial crisis and warned that "fundamental changes" in the industry would likely mean little growth across the whole of 2018.

WPP at the time said it would focus on restructuring its sprawling global business of digital and traditional agencies into a more comprehensive unit as it rides out a year in which it sees only flat sales and modest improvements on margins. Net sales for 2017 fell 0.9%, the group said, while like-for-like revenues fell 0.3%.

"The major factors influencing this performance were probably the long-term impact of technological disruption and more the short-term focus of zero-based budgeters, activist investors and private equity than, we believe, the suggested disintermediation of agencies by Google and Facebook or digital competition from consultants," Sorrell said.

Sorrell's pay has been a hot-button topic among investors who have voted against his pay package, which regularly makes him the highest paid CEO on the FTSE.  Sorrell's total compensation in 2016 was £48.1 million, down from the £70.4 million he received in 2015.