The CEO and CFO of WANdisco have stepped down amid an investigation into potential fraud at the listed company.

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”.

Share trading in the data activation platform, headquartered in both Sheffield and California, has been suspended ever since.

Experienced chair Kenneth Lever was appointed to chair the investigation committee, which includes non-executive directors Peter Lees, senior independent NED and Karl Monaghan, chairman of the audit committee. The investigation is being undertaken by FRP Advisory and has to date primarily focused on the received purchase orders and related revenue and sales bookings of that one employee.

“The independent investigation has confirmed that purchase orders giving rise to recognised revenue of $14,936,215 for FY22 are false and that sales bookings of $115,461,616 recorded in FY22 are also false,” WANdisco stated to the London Stock Exchange.

“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 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.”

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With the aim of lifting the trading suspension and positioning the company for long-term growth, it added: “It is in the best interests of all stakeholders if this objective is pursued under new leadership.”

Lever will assume the role of executive chairman, pending the conclusion of a formal process to appoint a new chief executive, which will commence shortly.  

Meanwhile Ijoma Maluza, previously the CFO of robotic process automation firm Blue Prism plc, has been appointed as interim CFO, effective from 11th April 2023. 

“I am sad to be leaving WANdisco after 18 extremely enjoyable years. I remain a passionate supporter and significant shareholder of the company,” said Richards.

Lever added: “Over the years David and Erik have contributed significant time and effort to establishing and developing WANdisco. They remain meaningful shareholders in the business and continue to believe in the long-term, successful future for this company and its unique technology.”

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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