The Financial Conduct Authority is investigating WANdisco amid concerns over potential fraud at the listed Sheffield tech firm.

Co-founder Dave Richards (pictured) and his finance chief Erik Miller last month identified “significant, sophisticated and potentially fraudulent irregularities… as represented by one senior sales employee”.

Both subsequently stepped down amid an internal investigation. Share trading in the data activation platform, headquartered in both Sheffield and California, has been suspended since the initial report.

Now the FCA has commenced an external investigation into the company.

“The investigation relates to certain regulatory announcements released by the company during the period 1st January 2022 to 9th March 2023, which may have materially mis-stated the company’s financial position,” stated WANdisco.

“The board is cooperating with the FCA in this endeavour, in addition to continuing to support the completion of the independent investigation already being undertaken by FRP Advisory.”

Experienced chair Kenneth Lever was appointed to chair the internal investigation committee, which includes non-executive directors Peter Lees, senior independent NED and Karl Monaghan, chairman of the audit committee. 

Preliminary findings suggested that purchase orders from that one employee giving rise to recognised revenue of almost $15m for FY22 were false, and that sales bookings of around $115.5m recorded in FY22 were also false.

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“Revenue for the financial year to 31st December 2022 referenced in the trading update dated 11th January 2023 should have been $9.7 million as compared with not less than $24m and bookings should have been $11.4m compared with $127m,” the company stated at the time.

“The results of the independent investigation to date continue to support the initial view that the irregularities are as a result of the actions of one senior sales employee.  

“The board changes are not connected to the findings.”

Lever assumed the role of executive chairman, pending the conclusion of a formal process to appoint a new chief executive, while Ijoma Maluza, previously the CFO of robotic process automation firm Blue Prism plc, was appointed as interim CFO.

WANdisco, which helps businesses to harness the power within their unstructured data using analytics tools powered by artificial intelligence, had announced plans to explore an additional listing in New York before the news of potential fraud broke.

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