Wandisco woes worsen as FCA launches fraud probe

20th Apr 2023 07:43

(Sharecast News) - Embattled tech firm WANdisco's woes worsened on Thursday as the UK's finance watchdog said it was starting a fraud probe into the company.

The Financial Conduct Authority's (FCA) investigation follows an internal inquiry into suspected fraud at the company which found more than $115m in missing bookings, leading to the departure of its chief executive and finance head.

WANdisco said it was co-operating with the FCA "in addition to continuing to support the completion of the independent investigation already being undertaken by FRP Advisory".

Last month CEO and co-founder David Richards and Erik Miller, chief financial officer, decided to step down after the firm said the probe confirmed that its published purchase orders and sales bookings for last year were false.

Revenue for 2022 should have been $9.7m rather than $24m, and bookings should have been $11.4m rather than $127m.

The company earlier this month asked for its shares to be suspended in London as it discovered a major fraud that could threaten it as a going concern as it ripped up guidance for 2022 and said an investigation was under way to identify its "true financial position" after sales booked by an employee appeared to have been inflated in what it described as "significant, sophisticated and potentially fraudulent irregularities."

WANdisco said the ongoing investigation supported the view that one employee was responsible, and Monday's resignations were not connected to its findings, but the plan to restore share trading was best pursued under new leadership.

Ken Lever, appointed interim chair last month, would run the company until a new chief executive was appointed, and also appointed Ijoma Maluza, previously CFO of Blue Prism, as interim CFO from April 1

Reporting by Frank Prenesti for Sharecast.com