Scandal-hit WANdisco wins shareholder backing for $30m equity fundraise as part of turnaround plan

Shareholders have backed plans for a $30m (£24m) equity fundraise for Sheffield and California-based data company WANdisco as the firm looks to recover in the wake of a financial scandal.

The company’s board received 98 per cent support in a vote on its plans to launch an equity fundraise towards the end of June.

Shares in the data specialist were suspended in March after it revealed that it may have mis-stated its expected revenues for 2022, saying it could be as low as $9m (£7.6 million) compared with a previously stated $ 24m (£20.4 million).

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A shock company statement on March 9 said the issue relating to purchase orders represented by an unnamed employee had been uncovered following investigations by co-founder and chief executive David Richards, and Erik Miller, its chief financial officer.

An announcement of the vote result was made to the London Stock ExchangeAn announcement of the vote result was made to the London Stock Exchange
An announcement of the vote result was made to the London Stock Exchange

FRP Advisory was called into lead an independent investigation and on April 3 it was announced Mr Richards and Mr Miller were stepping down from the leadership team.

On the same day, it was revealed the investigation had found recognised revenue of $14.9m and sales bookings of $115m were “false” and should have been $9.7m and $11.4m respectively.

In April, it was announced the report had found a single “senior sales employee” was responsible.

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It was also announced in April that the Financial Conduct Authority was starting its own investigation separate to the FRP probe.

Ken Lever, Chairman of WANdisco, welcomed the shareholder support for the equity fundraising plan which intends to strengthen its balance sheet as it works towards the resumption of trading in the company’s shares.

He said: "The passing of these important resolutions is a critical milestone for funding the company and supporting the re-listing process, which I believe is important for the benefit of all our shareholders and stakeholders.

"I would like to thank our shareholders for their overwhelming support. This follows a fulsome consultation where I have personally met a large majority of our shareholder base and received strong support for the Board's plans.

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"We will now move to the next stage of our capital raising plans which will include an investor roadshow later in June and will keep our shareholders informed as appropriate."

The company has reduced its headcount by 30 per cent and is reducing its annualised cost base from $41m to $25m in the fallout to the fraud scandal.

A statement in May said: “Alongside cost reductions and working capital improvements, the Board has determined that raising finance is fundamental to the success of the Turnaround Plan given the current cash runway extends only until mid-July 2023.”