Brogan quits as CEO of troubled software group Datalex
AIDAN Brogan, the CEO of troubled 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.
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Sean Corkery, deputy chairman of the group, will take up responsibility as acting CEO while the board undertakes a search for a permanent CEO.
In a brief statement the company said it would update the market further "in due course".
This week Datalex suspended trading in 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. These latest developments come after the company itself earlier launched a review of its 2018 financial performance after uncovering what the board described as "significant accounting irregularities".
A report by PwC for the company found it had failed to apply the international IFRS 15 accounting standard "appropriately" to its results for the first half of 2018.
That 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 (€3.1m) of revenue for the contract in the first six months of 2018, which has subsequently been corrected by the group.
It also noted that about $2.9m of other services and platform revenue was incorrectly recognised in the period, of which $700,000 is not recoverable.
The balance will be recognised in respect of the second half of 2018, or in the 2019 financial year.
The review also found that there were "material weaknesses" in Datalex's internal control environment.
Last week the embattled company held an extraordinary general meeting of shareholders to approve a loan from Dermot Desmond, Datalex's biggest shareholder.
Earlier this year, Mr Desmond's IIU shored up the software company's balance sheet via a €3.8m share placing, lifting IIU's holding to 29.9pc, and a €6.1m secured loan facility to the group, which was approved by 100pc of shareholders at last Friday's EGM.
Datalex has offices in Dublin, Manchester, Beijing, Amsterdam and Atlanta.