An internal probe into potential fraud at listed Sheffield tech firm WANdisco has concluded as the Financial Conduct Authority’s external investigation continues.

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” at the company.

Share trading in the data activation platform was immediately suspended, while both Richards and Miller stepped down and an internal investigation led by FRP Advisory commenced.

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

Preliminary findings suggested 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.

“It remains the case that the evidence identified supports the initial view that the irregularities are as a result of the actions of one senior sales employee only,” WANdisco stated following the conclusion of its investigation.

“All of the purchase orders associated with the senior sales employee in question are illegitimate; all other purchase orders (i.e. those not associated with or secured by the senior sales employee in question) are legitimate.”

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Lever had 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, is headquartered in both Sheffield and California.

It added that there is “no credible evidence” that there are any customers using its technology making payments to an unauthorised third party.

“Notwithstanding that it would be technically extremely difficult for a third party to implement and deploy the company’s product without the knowledge and support of the company, it is not possible to provide a completely definitive conclusion that there has been no unauthorised use by a third party,” it said.

Lever stated: “We are pleased to receive these findings, which confirm the limits of the impact of the identified irregularities in line with our announcement of April 3rd. The board remains squarely focused on workstreams to lift the suspension of our shares as soon as is practicable and position WANdisco for long-term growth and success.”

The FCA investigation into the firm, which had announced plans to explore an additional listing in New York before the news of potential fraud broke, is ongoing.

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