WANdisco has confirmed that one senior sales rep entered $14.9 million in fictitious orders in 2022, dwarfing the $9.7 million brought in by the rest of the sales team.
The company sells replication-based software to move data from edge and central databases to the public cloud under commit-to-consume contracts. Recorded sales bookings for 2022 of $127 million had grown so fast that co-founder, chairman and CEO Dave Richards thought his business was unstoppable. He told us days before the fiasco was uncovered in March that in the live data movement market WANdisco has no competition: “We have 100 percent market share.”
Days later the company’s share trading on AIM was suspended when its 2022 results were found to be unauditable due to fake sales, and it hired an accountant to go over its books.
Richards and his CFO, both duped, subsequently resigned, a new chairman, Ken Lever, and new CFO, Ijoma Maluza, were put in place. The search for a new permanent CEO is under way.
Forensic accounting firm FRP Advisory confirmed today that the fake sales were all due to a single senior sales employee. Lever 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.”
That statement early this month said sales bookings of $127 million, initally reported for 2022, were false and should have been $11.4 million. Revenue was actually $9.7 million and not $24 million. Now that FRP’s conclusions are being sent to the auditors, 2022 accounts will be forthcoming.
A WANdisco statement is admirably clear: “All of the purchase orders associated with the senior sales employee in question are illegitimate… all other purchase orders… are legitimate.”
In summary: “It remains the case that the evidence identified supports the initial view that the irregularities are as a result of the actions of one senior sales employee only.”
The board wants share trading for WANdisco stock to resume and is working to that end, with Lever saying: “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.”
The FCA investigation into the company is ongoing.