Embattled British technology business WANdisco has revealed that a single individual was behind the inconsistencies in its revenue and sales results.
Seven weeks ago, the software provider suspended trading of its shares on the junior AIM market after uncovering ‘significant, sophisticated and potentially fraudulent irregularities’ in the previous year’s financial statements.
Professional services group FRP Advisory was subsequently appointed to lead an investigation into the matter. The Financial Conduct Authority is also conducting a probe into the alleged fraud.
Problem: Seven weeks ago, WANdisco suspended trading of its shares after uncovering ‘significant, sophisticated and potentially fraudulent irregularities’ in its financial statements
Earlier this month, it reported that almost $15million of turnover and more than $115million of sales were falsely added to the company’s 2022 financial results.
WANdisco actually made $9million in revenue last year instead of the $24million recorded in January 2023, while its bookings totalled a meagre $11.4million rather than the previously declared $127million.
FRP reiterated those findings on Friday, as well as its judgement that all purchase orders connected to an – as yet unnamed – senior sales employee were ‘illegitimate’ while all other orders were above board.
It also said that ‘no credible evidence’ existed of customers who use the company’s technology of unintentionally making payments to an unapproved third party.
WANdisco’s founder and chief executive, David Richards, and finance boss, Erik Miller, stepped down f0ppthe publication of those preliminary conclusions, although the business claimed their departures were unrelated to the findings.
Kenneth Lever, the group’s recently-appointed executive chairman, said: ‘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 3.
‘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.’
WANdisco will now pass on the report’s findings to its auditors in order for the 2022 financial results to be continued and finalised.
Founded in 2005 and dually-headquartered in Sheffield and California, WANdisco designs software that enables companies to transfer large datasets to the cloud for use in fields like artificial intelligence and machine learning.
Prominent clients have included technology giants Google and Amazon, web hosting platform GoDaddy, carmaker Mercedes-Benz Group, and the University of Sheffield.
Prior to March 2023, it was one of the UK’s fastest-growing firms and considering listing its shares on Wall Street in the hopes of gaining a higher valuation.
