The mobile firm's flamboyant co-founder is Boris Johnson's latest adviser to step down

THE GLITTERING career of Carphone Warehouse co-founder David Ross is unravelling at a rapid pace, with the fallout from the "Rosso" affair infecting not only the corporate but also the political world.

Little more than 24 hours after he was forced to resign from the firm he founded with schoolboy friend Charles Dunstone almost 20 years ago, Ross yesterday stepped down from his high-profile role as 2012 Olympics adviser to London mayor Boris Johnson. A few hours later, he relinquished his chairmanship of National Express, another of the companies caught up in his secret share dealings.

One of Britain's richest men and most eligible bachelors, Ross (43) was regarded as the real brains behind the success of Carphone Warehouse. Dunstone was fond of describing him as the firm's "secret weapon".

Pictured more frequently in the gossip columns than the financial pages, Ross enjoys a colourful private life. The tabloids have eagerly tracked his relationships with a string of beautiful women, including Will Carling's ex, Ali Cockayne. He has a son with former lap-dancer Michelle Ross, although they never married.

A lavish lifestyle includes homes in the Caribbean island of Mustique, Switzerland and London's Knightsbridge. He has two country piles in England - Brampton Ash in Northamptonshire and Neville Holt, a grade-one listed mansion in Leicestershire which once belonged to the Cunard shipping family. He also owns a grouse moor in north Yorkshire.

His sudden and dramatic fall from grace has sent shockwaves through the corporate and political establishments and his departure as Johnson's adviser is the latest in a string of resignations to hit the new mayor's administration. Since his victory just nine months ago, five of Johnson's aides have stepped down or been sacked.

Johnson had barely got his feet under the table at City Hall before the first went - James McGrath, chief political adviser, who was forced to quit after suggesting immigrants should go back to where they came from if they didn't like the way London was run. Other departures included Bob Diamond, the wealthy Barclays banker, who decided he did not have enough spare time to run a fund for disadvantaged Londoners. One can only conclude that Johnson is either very bad at selecting advisers or extremely unlucky.

As for Ross, is he very bad, very stupid or simply forgetful? Whichever it is, his reputation is in tatters over his failure to disclose that he had pledged millions of pounds of shares in companies where he served as a director as collateral for personal loans. The bulk of the shares used as collateral by Ross - worth about £160 million at current prices but far more when the pledges were made between 2006 and 2008 - were in Carphone Warehouse, where, until Monday, he was deputy chairman.

But Carphone is not the only company to be dragged into the scandal. Ross failed to tell fellow directors in three other firms that he had used his stakes to raise further cash for his personal business interests. National Express was the most prominent of these. The other two were storage company Big Yellow and Cosalt, the Grimsby-based marine safety company.

There is nothing untoward in borrowing against share stakes, but such deals must be disclosed to the company and the stock market. Ross did neither.

Suggestions that he simply forgot seem fanciful, as he had previously declared similar deals with a smaller parcel of Carphone shares in 2002 and 2003.

The furore over the secret pledges has not just raised questions over Ross's judgment, but has thrown an unforgiving spotlight on his private business interests, which are largely in the bombed-out commercial property market. Ross has put substantial sums into Kandahar Real Estate, a joint venture with Morgan Stanley which invests in shopping centres.

While he stressed that none of his loans are in default and he has no plans to sell his shares, there is speculation that he is suffering cashflow problems. The uncertainty surrounding his position saw sharp falls in the shares of Carphone, Cosalt, Big Yellow and National Express and their shares are likely to remain under pressure until there is more clarity over the health of his business empire.

Others will also seek reassurance - Tory donor Ross is friendly with David Cameron and is said to have given Cameron the use of his private helicopter on several occasions.

In stepping down from his Olympics role yesterday, Ross said his priority now was to "devote my full attention to my private business empire". Other than that brief statement, he has remained silent and has yet to offer an explanation for his conduct.

But pressure is mounting on the party-loving tycoon. The City's watchdog, the Financial Services Authority, will be keen to learn how this could have happened and has the power to impose a hefty fine if it doesn't like what it hears.

• Fiona Walsh writes for the Guardiannewspaper in London