Carphone Warehouse co-founder David Ross has resigned after it was found he was using his shares in the retailer as security for personal loans.

Between 2006 and this year, Ross pledged 136.4 million of the ordinary shares he holds in Carphone Warehouse against personal loans without notifying the business.

In a statement Carphone Warehouse said that Ross has notified the company that none of these loans are in default at present and that he has no intention to sell his shares. “In addition, he has given an undertaking to the board to facilitate an orderly market, where possible, for any potential future disposal of shares in the company,” it said.

Ross will resign as a director of the company with immediate effect and continue to pursue his other business interests.