The chief executive of Reckitt Benckiser (LSE: RB.L - news) pledged millions of pounds of shares in the company to secure a personal loan more than two years ago without investors being told, it has emerged.

Rakesh Kapoor, who earned 736,000 last year, used shares currently worth 7.4m as collateral for a personal loan with Bank of America Merrill Lynch. More shares were added after the loan was taken out in June 2010, taking the total value of the shares to 8.7m at todays prices.

The position was only revealed to shareholders after the company consulted with the Financial Services Authority. Regulations make it clear the market must be informed if shares are used as collateral for loans.

The issue around shares and personal loans received huge publicity in 2008 when the entrepreneur David Ross was forced to step down from the boards of Carphone Warehouse and National Express over similar failings . The Tory party donor failed to make a timely disclosure of how 14.5m of shares in companies he was involved in were used as collateral for more than 100m of loans.

On Monday, Reckitt, which makes household products ranging from Dettol to Gaviscon and Vanish, said the situation had come to light after an internal review.

The company also disclosed that Freddy Caspers, a member of the companys executive committee, sold 200,000 shares in December 2008. The shares are worth 7.3m at todays prices.

Mr Caspars is in charge of Reckitts Latin American and Australasian business. As such he was a person discharging managerial responsibility (PDMR) and obliged to inform the market of all dealings in Reckitt shares.

The company declined to explain how the transaction was almost four years late being reported to the market.

In a statement it said: To ensure timely disclosure going forward for PDMRs the company has reviewed and updated its internal reporting process.

The issue will be particularly embarrassing for Reckitt as it has long been targeted over executive pay.

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Reckitt comes clean over millions of pounds of directors' share deals