Bytes Technology Group plc is investigating the shock resignation of its former CEO after he was accused of unauthorised trading in the company’s shares.

Neil Murphy, a longstanding member of the Surrey firm’s leadership team, is accused of engaging in 134 unauthorised share transactions from 2021 to 2023.

The Financial Conduct Authority sent Murphy a voluntary request for information on 14th February which indicated that he may have conducted additional transactions that were not disclosed to the market or the FCA following the company’s IPO in December 2020.

Murphy informed the Bytes board that he would share his draft response to the FCA’s inquiries at a scheduled board meeting on 21st February. However, on the morning of this meeting, he unexpectedly resigned with immediate effect – indicating that he had failed to make disclosures related to his share dealings.

It transpired that he had engaged in unauthorised and undisclosed trading of the company’s ordinary shares on 66 trading days, totalling 119 transactions. Last week Murphy’s lawyers then provided the company with additional information outlining 15 additional transactions on 10 different trading days conducted by Murphy on behalf of his wife.

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“The board of directors is saddened as well as shocked by Mr Murphy’s actions, which it finds hard to comprehend. His actions were entirely at odds with the values of openness, honesty, and transparency which have been and which remain central to the group’s culture and to its ongoing success,” Bytes stated.

It also said: “This revelation came as a shock to the other board members, especially considering the company’s previous investigation during 2023 into an unrelated share dealing disclosure matter which had clearly highlighted to all board members the importance of absolute accuracy and transparency.”

Earlier in FY24, Bytes initiated an external investigation into the circumstances relating to an undisclosed share purchase by a person closely associated (PCA) with former non-executive director Alison Vincent.

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“The board has now appointed another independent committee of the board to investigate the resignation of Mr Murphy and his undisclosed share transactions,” added Bytes.

“The outcome of the committee’s investigation will be shared with EY, the external auditors, in the context of their current year audit.

“Once the committee has completed its investigation and reported to the board, the company will be able to provide a date for the release of its preliminary results for FY24.  It is currently envisaged that this will be in late May or early June 2024.”

In a separate announcement Bytes, a software, security and cloud services specialist currently led by interim CEO Sam Mudd, revealed record results for the year ended 29th February 2024.

The firm’s share price fell from 566p on Friday to 496p at the time of writing (9am Monday) following the announcements. Its share price had peaked in January at 647p.

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