Wandisco shares suspended as tech group flags potential internal fraud
Wandisco shares suspended as cloud data firm flags possible internal fraud and slashes revenue expectations – days after it announced US listing plans
- Firm flags ‘significant, sophisticated and potentially fraudulent irregularities’
- Revenues could be about 60% lower than expected at just $9 million
Wandisco has lowered sales expectations and requested the suspension of its shares after uncovering “significant, sophisticated and potentially fraudulent irregularities” in its sales data.
The cloud data specialist, which last week revealed plans to list its shares in the US in a bid to attract a higher valuation, told investors Thursday that the “irregularities” give rise to a possible material misstatement of its financial position.
Wandisco could now book revenues of just £9 million (7.6 million), about 60 percent lower than previous forecasts of $24 million, and the group is now “not confident” in its full-year booking expectations, it said. It.
Shares in cloud data company Wandisco have been suspended as possible fraud has been discovered
The group is now conducting an investigation with outside legal and professional advisers into “the nature of this activity and its true financial position,” Wandisco said, and has requested that trading of its shares on AIM be suspended in the meantime.
Wandisco said: “Following an investigation conducted by the CFO and CEO, and as reported to the company’s board of directors, there are significant, sophisticated and potentially fraudulent irregularities regarding purchase orders received and related revenues and bookings, as represented by a senior sales associate. employee have been discovered.
These irregularities give rise to a possible material misstatement of the Company’s financial position.
“The identification of these anomalies will have a significant impact on the company’s cash position and lead to material uncertainty regarding the overall financial position and significant going concern issues.”
Wandisco sharesnow suspended sat at 1,324.4p at last night’s close – reflecting growth of more than 360 percent over a year.
Victoria Scholar, Chief Investment Officer at Interactive Investor said: “These potentially fraudulent irregularities, represented by a senior sales associate, could spell financial disaster for Wandisco.
It has already stressed that sales could be less than half of previous expectations and its financial outlook has been called into question. At the request of the company, trading of shares on AIM has been temporarily suspended pending an investigation with outside legal and professional advisors.
After an impressive year-to-date share price performance of 43 percent, this Black Swan event has the potential to sharply derail its bullish trajectory and result in a significant negative revaluation of the asset’s valuation. share, depending on the outcome of the findings.
The company, headquartered in both Sheffield and San Ramon, California, and listed on the London junior market, confirmed last week that it is in “the early stages of proactively exploring” an additional US listing.
It followed shortly after Arm and CRH offered cold shoulders to London markets, raising concerns about the capital’s declining ability to attract big business.
Wandisco operates all over the world, but North America is the largest market in terms of revenue.
Wandisco shares, now suspended, stood at 1,324.4p at last night’s closing price – reflecting growth of more than 360 percent over a year.