-- adds share sale detail --
Globo’s (LON:GBO) future was thrown into doubt today as the mobile app developer revealed its chief executive had quit after confirming allegations data and accounts had been falsified.
Costis Papadimitrakopoulos had also sold almost two-thirds of his holding, more than 42mln shares, before a scathing report into its operations was published last week, the company said.
Shares in the AIM-listed group were suspended on Friday after US hedge fund, Quintessential Capital Management published a report claiming the group had massively overstated its revenue and profit.
In today’s statement, Globo said former CEO Papadimitrakopoulos had brought “certain matters regarding the falsification of data and the misrepresentation of the company's financial situation” to the board’s attention at an emergency meeting on Saturday to discuss the hedge fund allegations.
Papadimitrakopoulos then resigned as chief executive with chief financial officer Dimitris Gryparis, while chief operating officer Gerasimos (Makis) Bonanos has been suspended with immediate effect.
A new committee of non-executive board members has been set up to find out what has been going on.
“The committee has initiated discussions with appropriate advisers in relation to the next steps and to ascertain the true financial position of the company.
“In addition, the committee has asked the company's lawyers to notify the matter to the appropriate authorities and the committee has informed the company's principal bankers,” the statement said.
The share sale was revealed in a separate stock market statement, which indicated that Papadimitrakopoulos had pledged 10mln Globo shares under a personal loan agreement with a company called Lantau Holdings.
No details on the exact date or price of the share sales were released today other than it was before 22 October, when the Quintessential report was released.
Papadimitrakopoulos’ stake after the sale is now 27.7mln shares or 7.4%.
Canaccord Genuity, meanwhile, resigned as Globo’s joint broker with immediate effect this morning.