Executives at Cirata have expressed relief as the financial regulator concludes a two-year investigation into the software company, marking an end to the dramatic events that led to a significant drop in the firm's share price.
In March 2023, Cirata, previously known as Wandisco, admitted to inflating its sales figures, prompting an investigation by the Financial Conduct Authority (FCA). Wandisco's shares plummeted from a peak of £13 to mere pennies overnight.
The Sheffield firm had to temporarily suspend trading of its shares and cut around a third of its staff after the discovery of significant “irregularities” surrounding one senior salesperson and their received purchase orders, related revenue and bookings. The issue was thought to total around £12m.
New management was brought in at the firm and in 2023 the company rebranded to Cirata, with former Sage boss Stephen Kelly stepping in as the new CEO in an effort to salvage the business.
The company said the “time was right” for a rebranding and that “with Cirata as a new canvas, we are creating a sharper and more compelling vision for the company”, saying the new name reflected its transformation.
Now the FCA has announced that it has concluded its investigation and that it will not be pursuing any further action.
Mr Kelly stated: "The new management team tasked with rescuing the company from the brink after the dark days of March 2023, have worked tirelessly to build a company that the Ƶ tech sector can be proud of. ", as reported by .
"The announcement today heralds one sad chapter closed and a new chapter beginning."
Cirata's shares increased by 1.8% cent to 20p following the FCA announcement. The stock has fallen 15% since the start of the year.
At the time, the company withdrew its 2022 guidance and announced an investigation was in progress to determine its "true financial position" following the discovery that sales recorded by an employee appeared to have been inflated.
The business appointed Ken Lever, who had recently served as chair of waste management firm Biffa, to take on the role of interim chair whilst also leading its fraud investigation alongside non-executive director Peter Lees and audit committee chair Karl Monaghan.
Wandisco's internal investigation had established that its previously released purchase orders and sales bookings for 2022 were false. Revenue for the year ought to have been $9.7m instead of $24m, and bookings ought to have been $11.4m instead of $127m.
