WANdisco fraud probe traces irregularities back to one employee

28th Apr 2023 11:21

(Sharecast News) - WANdisco confirmed on Friday that a potential $14m fraud could be traced back to one rogue employee.

Following an investigation carried out by FRP Advisory, the UK software firm said all purchase orders associated with one senior sales rep were "illegitimate". All other orders not associated with the unnamed employee were, in contrast, legitimate.

The probe also found there was "no credible evidence" that any customers were unknowingly paying unauthorised third parties.

FRP's findings will now be passed onto WANdisco's auditors.

WANdisco stunned markets in March when it said "significant, sophisticated and potentially fraudulent irregularities" had been discovered relating to orders and bookings made by one senior sales employee.

The discovery meant full-year revenues should have been $9.7m, instead of the $24m it posted in January, while bookings should have been $11.4m and not $127m.

Shares in the AIM-listed firm, which earlier this year had been considering a dual US listing on the back of apparently buoyant sales, have been suspended.

Chief executive David Richards, who co-founded the business, and chief financial officer Erik Miller resigned earlier this month, although WANdisco stressed their departures were not related to the accounting irregularities.

FRP Advisory was brought in to carry out an independent investigation, and is continuing to assess both company processes and steps taken to improve internal controls.

Kenneth Lever, executive chair, said: "We are pleased to have received these findings, which confirm the limits of the impact of the identified irregularities.

"The board remains squarely focused on workstreams to lift the suspensions of our shares as soon as is practicable, and position WANdisco for long-term growth and success."