WANdisco? More like WANfiasco. Within weeks of the AIM-listed data software company letting it be known that it was solidifying its ambitions of pursuing a US stock market listing, the company went into freefall.

The emergence of transactions based on apparently fraudulent sale invoices triggered the immediate suspension of its shares and a frantic battle for survival.

Stephen Kelly, the former Sage Group boss, was drafted in as interim chief. His first task has been accomplished: corralling City investors into a $30m fundraising which ensures it lives to fight another day.

Nonetheless, the slump in WANdisco's share price in the wake of the resumption of trading tells its own story: a company with a market capitalisation of nearly £900m four months ago is now worth little more than £100m.

So a request to founder and former president and CEO David Richards (pictured), along with former finance chief Erik Miller that they repay nearly £650,000 in cash bonuses awarded last year feels entirely just.

It's a gross failing that the pair's contracts were not subject to malus and clawback provisions - something that WANdisco's next permanent chairman will surely seek to rectify.

A closer glance at the company's annual report underlines the moral imperative for Richards to agree to the company's request.

In the related party transactions section of its annual report, it emerged that a company owned by Richards and his wife had agreed a deal to sponsor Sheffield Wednesday, the newly promoted Championship football club.

No further detail is provided, but the payments look self-serving, to say the least.

Richards owes other shareholders a full explanation - as well as his bonus back.

Sadly, as I reported yesterday, both he and Miller have rejected the company's request to return the funds.

"Whilst the former executives have so far robustly rejected our request for repayment, the board firmly believes this should be the right and fair outcome for shareholders and remains committed to pursuing it," a WANdisco spokesman said in response.

If they maintain their stance, Richards and Miller risk becoming the latest emblems of a problem all-too familiar on the AIM market: lax governance enforced by guidelines which are unduly lenient, and with few reparations for ordinary investors when things go awry.

(c) 2023 City A.M., source Newspaper