Business Irish

Sunday 20 October 2019

Datalex: What happens next?

 

With shares set to be suspended from May 1 until probably the end of June any shareholder looking to sell now has just a week to do so. (stock photo)
With shares set to be suspended from May 1 until probably the end of June any shareholder looking to sell now has just a week to do so. (stock photo)
Donal O'Donovan

Donal O'Donovan

Datalex is understood to have selected a new chief financial officer to take over from Donal Rooney, who resigned in February having only started at the firm last December.

The loss of a top finance executive who hadn't been involved in last year's accounting irregularities and was therefore ideally placed to help sort out the mess was a big blow.

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It's understood the job has now been accepted by an external candidate who is in the process of exiting their current role.

Replacing the CFO is a key appointment at the embattled business.

Even after it sorts out its financial reporting, Datalex has its work cut out to rebuild trust among investors - many are already heading for the exits.

The new finance chief will have very little time to get their feet under the table - shareholders and analysts will be looking for as fast a turnaround on the 2018 financial results, and the company will be desperately conscious of the need to produce impeccable first-half results for 2019 in full and on time.

With shares set to be suspended from May 1 until probably the end of June any shareholder looking to sell now has just a week to do so.

On the other side, sellers face the reality that any share buyer in the current market is looking for deep discounts given the lack of complete financial information, which means they are effectively buying a pig in a poke.

On the plus side, regulators appear to be comfortable allowing Datalex time to self-correct, and a rights issue and loan from biggest shareholder Dermot Desmond has underpinned the balance sheet.

Irish Independent

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