2024-02-15 13:14:06
Geneva (awp) – The stock of banking software developer Temenos fell sharply on the Swiss Stock Exchange on Thursday, following allegations of accounting and contractual irregularities revealed by the financial research firm Hindenburg Research.
Shortly following 2 p.m., Temenos shares fell 32.2% to 59.96 Swiss francs, while its benchmark SPI index gained 0.57%.
“A four-month investigation into Temenos, involving interviews with 25 former employees including executives, reveals traces of manipulated profits and major accounting irregularities,” says Hindenburg Research in a study which details various files from several sources.
The firm puts forward “aggressive practices”. “Several former employees indicated that CEO Andreas Andreades encouraged these practices, which helped mask significant customer dissatisfaction and attrition with the products,” according to the publication.
According to one of the sources cited by the research firm, “any time a partner announces, or Temenos announces that a partner has purchased a license, all of that is false, in my opinion. It is an accounting fraud limit, in my opinion.
Another file concerning the American banking services provider Mbanq is added with the declarations of a former Temenos executive. “Mbanq purchased $20 million worth of software and services from Temenos as part of the transaction, while Temenos financed the purchase of its own software through an undisclosed ‘investment’ in Mbanq. “
Various alleged frauds such as “backdating of contracts” or “false partnership agreements” with several companies are detailed, in particular by former executives of the group.
Hindenburg Research considers the stock “too expensive” on the stock market and believes that Temenos “will soon run out of accounting tricks, new unwitting customers who believe its sales pitches, and new investors ready to buy as management continues for sale”.
Contacted by the AWP agency, Temenos did not want to comment on this information.
The group will publish its annual results on February 19 following the stock market closes.
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