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Cyber security firm Darktrace wins accounting all-clear

US sanctions network smuggling American tech to Iran's central bank
Source: Pixabay

Shares in Darktrace surged Tuesday after the British cybersecurity company said independent auditors EY found no irregularities in its accounts despite concerns.

Its share price surged nearly 23 percent to 360 pence in London afternoon deals, boosted also by bumper earnings.

The company, which uses cutting-edge artificial intelligence technology to combat cyberattacks, floated on the London stock market in 2021.

However, its shares had tumbled on concerns over the group’s accounts, and after US private equity firm Thoma Bravo ended its takeover interest in 2022.

In February this year, the firm commissioned EY to conduct an independent audit.

This came after the US hedge fund Quintessential Capital Management bet on Darktrace’s shares dropping in the short term.

The fund had previously hit out at Darktrace‘s accounting practices.

“EY has concluded the independent third-party review of the policies, processes and controls,” Darktrace said in a statement Tuesday.

“Management and the board do not believe that EY’s report has any impact on Darktrace’s previously filed public company financial statements nor does it change their belief that those financial statements fairly represent Darktrace’s financial position and results.”

In May, co-founder Mike Lynch was extradited to the United States on fraud charges.

British businessman Lynch is accused of being involved in a massive fraud in the United States by inflating the value of Autonomy before its sale to HP for $11 billion in 2011.

The deal resulted in colossal financial losses for the US firm when the true situation emerged after the sale.

Lynch disputes all charges and denies any wrongdoing.

Darktrace has denied it was targeted by the US fraud probe.

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Agence France-Presse (AFP) is a French international news agency headquartered in Paris, France. Founded in 1835 as Havas, it is the world's oldest news agency.

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