Belfast Telegraph

Chief executive of troubled Irish tech group Datalex quits

By Ekllie Donnelly

Aidan Brogan, the chief executive of troubled Irish software group Datalex, resigned with immediate effect yesterday.

Mr Brogan's resignation comes just a week after the group's chairman, Paschal Taggart, announced he was stepping down, having served as a director at Datalex for 17 years and chairman for nine.

Sean Corkery, deputy chairman of the group, will take up responsibility as acting CEO while the board searches for a permanent chief executive.

In a brief statement the company said it would update the market further "in due course".

Datalex has offices in Dublin, Manchester, Beijing, Amsterdam and Atlanta.

Earlier this week the company suspended trading of its shares because it was not able to publish financial accounts by April 30, as required under Central Bank of Ireland rules.

Trading will remain suspended until the accounts have been published, which it is understood may not happen until the end of June.

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The latest developments come after the business launched a review of its 2018 financial performance after uncovering what the board described as "significant accounting irregularities".

An investigation conducted by PwC found Datalex had failed to apply the international IRFS 15 accounting standard appropriately to its results for the first half of the period.

The standard relates to rules on how future revenue streams from contracts with customers are booked.

The misstated results for the first half of 2018 were down to early recognition of revenues associated with a significant customer, understood to be German airline Lufthansa.

The report found that Datalex had incorrectly recognised about $3.5m (£2.7m) of revenue for the contract for the aforementioned period.

The error was subsequently corrected by the group.

The report also noted that about $2.9m (£2.2m) of other services and platform revenue was incorrectly recognised, of which $700,000 (£538,000) is not recoverable.

The balance will be recognised in respect of the second half of 2018, or in this financial year.

The review also found that there were "material weaknesses" in Datalex's internal control environment.

Belfast Telegraph