DAVIS & GILBERT LLP
1740 BROADWAY
NEW YORK, NEW YORK 10019
DIRECT DIAL NUMBER MAIN FACSIMILE
(212) 468-4944 (212) 468-4888
EMAIL ADDRESS PERSONAL FACSIMILE
rnorton@dglaw.com (212) 974-6969
November 13, 2009
VIA EMAIL AND EDGAR
Cecilia Blye, Esq., Chief
Office of Global Security Risk
Securities and Exchange Commission
Division of Corporation Finance
100 F Street, N.E.
Washington, D.C. 20549
Re: WPP plc
Form 20-F for the Fiscal Year Ended December 31, 2008
Filed May 12, 2009
File No. 0-16350
Dear Ms. Blye:
On behalf of WPP plc (the "Company"), this letter responds to the comments
received from the Division of Corporation Finance of the Securities and Exchange
Commission (the "Commission") in a letter dated September 30, 2009 (the "Comment
Letter") pertaining to the captioned report on Form 20-F. For ease of reference
in this letter, the Commission's comments contained in the Comment Letter are
reproduced in bold in numerical sequence in this letter, and the corresponding
responses of the Company are shown below each comment.
1. It appears from your website and the websites of certain of your
subsidiaries that some of your divisions and subsidiaries have offices
in Damascus, Syria. It appears from various news articles and other
public sources that certain of your subsidiaries have offices in Iran
or Syria, and have engaged in business activities associated with Iran
and Cuba.
We note that your Form 20-F does not discuss contacts with Iran, Syria
and Cuba. Iran, Syria and Cuba are identified by the State Department
as state sponsors of terrorism, and are subject to U.S. economic
sanctions and export controls. Please describe to us the nature and
extent of your past, current, and anticipated contacts with Iran,
Cecilia Blye, Esq.
Securities and Exchange Commission
November 13, 2009
Page 2
Syria and Cuba, whether through affiliates, distributors, or other
direct or indirect arrangements. Your response should describe any
services you have provided into those countries, and any agreements,
commercial arrangements, or other contacts you have had with the
governments of those countries or entities controlled by those
governments.
The limited activities that the Company has engaged in that are associated
with Iran and Syria are described below. The Company does not have any direct or
indirect contacts with Cuba. To put the activities in Iran and Syria in context,
the Company's overall revenues in 2008 were approximately $12.3 billion. To the
best of our knowledge, no U.S. persons (including U.S. citizens, permanent
residents, individuals or entities physically located in the U.S., and branches
and subsidiaries of U.S. corporations) are involved in these activities.
The discussion below is organized by principal operating unit.
JWT
---
The Company indirectly owns 31.08% of JWT Limited Liability (formerly known
as J. Walter Thompson Damascus, d/b/a Tihama al Mona Damascus), a Syrian company
("JWT LL"). JWT LL provides advertising services to clients in Syria. JWT LL's
revenues associated with these services were approximately $631,000 in 2006,
$523,000 in 2007 and $726,000 in 2008. The Company's proportionate share of
these revenues would be approximately $196,115 in 2006, $162,548 in 2007 and
$225,641 in 2008; however, dividends actually received by the Company were nil
in 2006, $105,000 in 2007 and $101,000 in 2008.
JWT does not have any assets, employees or operations in Iran. However, in
order to service certain clients with business in Iran JWT LLC, a United Arab
Emirates company, obtains some services from a local agency called Darvaag. JWT
LLC bills the clients on behalf of Darvaag but earns no revenues from Darvaag's
work. There is no standing agreement between JWT LLC and Darvaag.
Ogilvy & Mather Worldwide ("Ogilvy")
------------------------------------
The Company owns a minority interest (40%) in Memac Holding Inc., a Panama
company, which, in turn, owns a minority interest (49%) in Memac Ogilvy Droubi
("Droubi"), a Syrian company that commenced operations in August of this year.
Therefore, the Company's effective interest in Droubi is only 19.6%. The Company
has no board representation in Droubi. Droubi provides advertising services to
clients in Syria. Droubi's revenues associated with these services are expected
to be approximately $160,000 in 2009. The Company's proportionate shares of
these revenues would be approximately $31,360.
The Kantar Group ("Kantar")
---------------------------
Certain units of the Company's Information, Insight and Consultancy
segment, managed under the umbrella of Kantar, perform services for clients in
Cecilia Blye, Esq.
Securities and Exchange Commission
November 13, 2009
Page 3
Iran and Syria. For such purposes, these companies, including AMRB and TNS
Middle East & Africa Ltd. ("TNS MEA"), subcontract the fieldwork to third party
agencies. AMRB's revenues associated with these services were approximately
$136,800 in 2006, $122,700 in 2007, $49,000 in 2008, and a total of $400,000 in
the first three quarters of 2009. TNS, which was acquired by the Company in
October 2008, earned revenues of approximately $1,400,000 in 2008 and $950,000
in the first nine months of 2009 for these services in Iran and Syria. Of the
amounts earned in 2008, TNS MEA paid out approximately $590,000 to
subcontractors. In addition, BMRB International, an affiliate of the Company,
has granted an Iranian company the right to use BRMB's Target Group Index
materials in Iran and has granted another Iranian company the right to use
BRMB's Publisher Tool Kit software in Iran. The revenue associated with these
license agreements is approximately $40,000 per year.
Hill & Knowlton
---------------
In July and August 2009, Hill & Knowlton Belgium, an affiliate of the
Company, provided services in connection with a small project (approximately
$12,000) to the subsidiary in the United Kingdom of Melli Bank, an Iranian state
owned bank.
Grey
----
Grey does not have any assets, employees or operations in Iran. However, in
order to service a European client with business in Iran, Grey Worldwide Middle
East Network Sarl ("Grey MENS"), an affiliate of the Company, obtains some
services from a local agency called Eshareh Advertising Agency ("Eshareh").
Eshareh purchases media space on behalf of Grey MENS for the client. Grey MENS'
revenues associated with these services were approximately $41,000 in 2006,
$85,000 in 2007 and $100,000 in 2008.
GroupM
------
The Company owns a minority interest (49.12%) in MEC (Mediaedge:cia) FZ LLC
("MEC"), which books media space in Syria for some of its international clients
through a local agency called Intermarkets Advertising LLC ("Intermarkets").
Intermarkets sometimes books media space outside Syria through MEC for some of
its own clients. MEC's revenues associated with these services were
approximately $7,600 in 2006, $8,500 in 2007, $5,200 in 2008 and $6,200 for the
first nine months of 2009. The Company's proportionate share of these revenues
would be approximately $3,733 in 2006, $4,175 in 2007, $2,554 in 2008 and $3,045
for the first nine months of 2009.
MEC has also booked media space in Iran for some of its international
clients through a local agency called Hadaf Nihai Co. MEC's revenues associated
with these services were approximately $10,500 in 2006 and $14,200 in 2007;
revenues associated with these services were nil in 2008 and the first three
quarters of 2009. The Company's proportionate share of these revenues would be
approximately $5,158 in 2006 and $6,975 in 2007.
Cecilia Blye, Esq.
Securities and Exchange Commission
November 13, 2009
Page 4
2. Please discuss the materiality of your contacts with Iran, Syria and
Cuba, and whether those contacts constitute a material investment risk
for your security holders. You should address materiality in
quantitative terms, including the approximate dollar amounts of any
associated revenues, assets, and liabilities for the last three fiscal
years and any subsequent period. Also, address materiality in terms of
qualitative factors that a reasonable investor would deem important in
making an investment decision, including the potential impact of
corporate activities upon a company's reputation and share value. As
you may be aware, various state and municipal governments,
universities, and other investors have proposed or adopted divestment
or similar initiatives regarding investment in companies that do
business with state sponsor of terrorism. You materiality analysis
should address the potential impact of the investor sentiment
evidenced by such actions directed toward companies that have
operations associated with Iran, Syria and Cuba.
The Company does not believe that its contacts with Iran and Syria are
material to its business. From a quantitative perspective, the Company's
contacts with Iran and Syria are negligible. Its aggregate 2008 revenues
associated with contacts with these two countries amounted to approximately
$1,400,000, or less than 0.015% of the Company's overall 2008 revenues. As noted
above, the Company does not have any contacts with Cuba.
Given the quantitative insignificance of the contacts described above, and
given that the contacts are focused exclusively on the provision of marketing
communications services on behalf of multinational clients, the Company does not
believe that its contacts with Iran and Syria pose any investment risk for its
security holders from a qualitative perspective, including any risk of a
potential material adverse impact on the Company's reputation and share value.
* * * *
On behalf of the Company we acknowledge that:
o the Company is responsible for the adequacy and accuracy of the
disclosure in its annual reports on Form 20-F;
o staff comments or changes to disclosure in response to staff comments
do not foreclose the Commission from taking any action with respect to
the annual reports on Form 20-F; and
o the Company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the federal
securities laws of the United States.
Cecilia Blye, Esq.
Securities and Exchange Commission
November 13, 2009
Page 5
Please do not hesitate to contact the undersigned at (212) 468-4944 if you
have any further comments or questions.
Very truly yours,
/s/ Ralph W. Norton
Ralph W. Norton
cc: Paul W.G. Richardson
Mark Povey, Esq.
Firouzeh Bahrampour, Esq.
Curt Myers, Esq.