Proactive Investors - Shares in Bytes Technology (LON:BYIT) fell another 13% after it revealed more details about the surprise resignation of its chief executive Neil Murphy last month.
An investigation was initiated following a request for information from the Financial Conduct Authority (FCA), which indicated that Murphy "may have conducted additional transactions that were not disclosed" since the company's initial public offer in December 2020.
On 14 February, the FCA contacted Murphy about potential undisclosed transactions. On the morning of 21 February, when he was meant to share his draft response at a board meeting, he instead abruptly resigned.
Investigations revealed Murphy's unauthorised trading of Bytes' shares on 66 occasions, totaling 119 transactions between 6 January 2021 and 10 November 2023.
On 12 March 2024, additional transactions conducted by Murphy for his wife were disclosed.
These revelations required Bytes to correct directors' shareholding disclosures in its annual reports for 2021, 2022, and 2023 financial years.
Bytes said it is cooperating fully with the FCA, including a comprehensive response last week regarding the company's processes and procedures.
Additionally, the board said it has taken steps to rectify related share-dealing disclosure issues uncovered in an unrelated investigation earlier in the financial year.
The committee engaged PwC for investigative work, Travers Smith LLP for legal advice on regulatory breaches, and EY to re-examine its audit after the incorrect disclosures were revealed. Recommendations have been taken on board for corporate governance and PDMR share dealing process improvements.
Another independent committee has been appointed to further investigate Murphy's resignation and the undisclosed transactions.
The outcome of this investigation will contribute to the external audit and necessitate a prior year adjustment to the directors' shareholdings disclosures in this year's directors' remuneration report, Bytes said.
Bytes plans to announce its preliminary results for FY24 following the completion of the current investigation, anticipated in late May or early June 2024.
"Given Mr Murphy's longstanding leadership position in the company, the board of directors is saddened as well as shocked by Mr Murphy's actions, which it finds hard to comprehend," Bytes said on Monday.
"His actions were entirely at odds with the values of openness, honesty, and transparency which have been and which remain central to the group's culture and to its ongoing success."