WANdisco (WAN) has suspended the trading of its shares after it discovered “sophisticated and potentially fraudulent irregularities with regard to received purchase orders and related revenue and bookings”. The company says the shares will remain suspended until it carries out an investigation. It has readied investors for "significant going concern issues" if the fraud is confirmed.
WANdisco looked to be one of the fastest growing listed UK companies this year. It had recorded $127mn (£107mn) of customer bookings last year up from just $11.9mn in 2021. Revenue was also expected to be “no less” than $24mn up from $7.2mn.
The company's software centralises data and moves it to the cloud and it said it had signed contracts with telecoms, automotive and industrial manufacturing companies in the past year. On top of that, Microsoft (US:MSFT) made the company an Azure cloud partner.
However, it appears that things were too good to be true, with the company saying the potentially fraudulent figures were "represented by one senior sales employee". In the light of this discovery, the board now expects 2022 revenue to be “as low” as $9mn and it has “no confidence in its announced FY22 bookings expectations”.
Management had put a lot of the its recent success down to pivoting to a "Commit to Consume" sales model in 2021. Originally, customers were paying up front for the contract that would last a set period of time. Commit to Consume meant the customers would pay as their data was moved to the cloud but wouldn't recognise any upfront revenue. Chief executive David Richards said they were moving to this model because it "aligns very well with how companies, particularly in the United States operate in the cloud".
This announcement comes just days after WANdisco said it was pursuing a joint listing in the UK and US. Given its share price had risen 364 per cent in the past year this was initially seen as another blow for the London stock exchange.
