In a statement, the agency said: "Lowe Worldwide today confirmed that it has suspended Garry Lace on full pay, in order to pursue an internal investigation into certain matters that have come to the company's attention.
"This action is consistent with the terms of Mr Lace's contract. Lowe anticipates that the investigation will be concluded by the end of the month and will not be providing updates until after the investigation has been completed."
It is understood Lace had met with Sir Frank Lowe in December -- the same month that Tesco shifted its £45m account out of Lowe and into Sir Frank's start-up. The agency would not confirm this was the reason for the investigation.
A number of senior Lowe executives defected to be with Sir Frank, but when executive creative director Ed Morris confirmed he was staying, Lowe hinted that he might get his name above the door, along with Lace.
It is not the first time Lace has been at the centre of an ad industry scandal. In 2004, he lost his job as chief executive of Grey London when an email was sent anonymously to a number of people saying that he had been planning to leave Grey London to go into business with Drew Thomson, the managing director of the agency's client Air Miles.
The claims of the email were denied, but within six months Lace had left Grey. Despite an investigation financed by Lace, which included seizing CCTV tapes from an internet cafe, the author of the email was never unmasked.
Lace resurfaced as the chief executive of Lowe London in January 2005, taking over from Matthew Bull at a time when the agency had lost significant business, and helping it to win accounts including the £100m Nokia N-series work.
But the agency has continued to lose clients, most recently the £45m Tesco account, which has shifted to Sir Frank Lowe's new agency, The Red Brick Road.
Lace's suspension comes as London-based Tony Wright has been shifted to the position of chairman of Lowe Worldwide, with Interpublic sending in Stephen Gatfield to take over as chief executive.
Lace began his career in advertising at Saatchi & Saatchi in 1990 before moving to Euro RSCG to head up the Peugeot business. He left Euro in 1997 to join TBWA\London as client services director, where he famously became the youngest agency CEO in London after his promotion in 2000. He joined Grey London in October 2002 and left in March 2004.
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