The top two executives at WANdisco have stepped down, as the troubled UK software company revealed an investigation into a potential fraud found the group had falsified almost $15mn in revenue last year.
WANdisco announced the departures of chief executive David Richards, who co-founded the tech company in 2005, and chief financial officer Erik Miller on Monday.
The company said these changes were “not connected to the findings to date of the independent investigation” into accounting discrepancies that began last month. But it added that appointing new leadership was “in the best interests of all stakeholders” as the company seeks to lift the suspension of its shares and achieve “long-term growth and success”.
Providing an update on the results of the probe so far, WANdisco said revenue in 2022 should have been $9.7mn, rather than the $24mn that it posted in January 2023, while bookings should have been $11.4mn rather than $127mn.
The findings by FRP Advisory, the body hired to lead the investigation, “continue to support” the view that a single senior sales employee is responsible for the “irregularities”, WANdisco said.
Richards said he was “sad to be leaving WANdisco after 18 extremely enjoyable years. I remain a passionate supporter and significant shareholder of the company.”
Ken Lever, who joined WANdisco’s board in March to chair the investigation committee supporting FRP Advisory, has been appointed executive chair, while the business will begin looking for a new chief executive.
Ijoma Maluza will replace Miller, having previously worked as chief financial officer at automation software business Blue Prism, where Lever was previously chair of an audit committee.
“[Richards and Miller] remain significant shareholders in the business and continue to believe in the long term, successful future for this company and its unique technology,” Lever said.
Richards did not immediately respond to a request for comment. Miller could not be reached for comment.
The company’s software enables large-scale migration of data to the cloud and it employs more than 180 people in Sheffield in the UK and San Ramon in California. Its customers include Google and Amazon.
WANdisco announced a string of lucrative deals with unidentified clients in 2022, causing its share price to rise 215 per cent from January 2022 until March, when shares were suspended.
In September 2016, Richards was briefly forced out of the business after a steep drop in its share price. He was reinstated a month later, causing the chair of WANdisco’s board and other directors to leave.
Earlier in March, WANdisco became the latest UK company to announce plans to list shares in the US, with plans to pursue a dual listing.
“There’s a strong message that they are not to blame [in the announcement] but this has happened in their tenure,” said George O’Connor, a technology analyst at Goodbody. “Investor confidence will have been shattered and they’ve left as part of that.”