Bytes reveals CEO made dodgy trades prior to resignation

Bytes Technology revealed that its former CEO, Neil Murphy, traded shares in the company during his tenure without notifying the board – which is illegal under UK and EU law. 

The UK-based company announced on Wednesday, 21 February, that Murphy has resigned from the position of CEO effective immediately. 

In that announcement, Bytes revealed Murphy notified its board that he had made several trades in the company’s shares that were not disclosed to the board or the market. 

The board has since investigated the nature of the trades and outlined how Murphy had been consistently buying and selling shares in the company for his personal gain. 

Since January 2021, Murphy purchased 313,741 shares at different share prices, with a total value of R31.01 million.

He then sold all these shares within the 2023 calendar year for a total value of R34.69 million.

Therefore, profiting R3.68 million without informing the company.

In constant currency terms, Murphy made a profit of £13,265.68 on his trades. Using the exchange rates at the time of Murphy’s trades, he profited around R3.67 million.

However, his large profit in rand terms is largely due to the currency’s depreciation versus the British pound since the company’s IPO in 2020. 

Excluding foreign exchange effects, he only profited R322,940 from the trades.

These trades were not disclosed to the company as is required by Article 19 of the Market Abuse Regulation, which is part of UK law.

The regulation states that all managers must disclose to their issuing company every share transaction they enter into above €5,000.

Bytes has its primary listing on the London Stock Exchange and a secondary listing on the Johannesburg Stock Exchange. 

The board said that – to the best of its knowledge – Murphy’s current holding of Bytes shares is 2,890,218 and remains unchanged from the position notified to the market on 28 November 2023. 

Bytes is one of the leading providers of software, security, AI and cloud services in the UK and Ireland. 

The company has a market cap of just over £1.3 billion (R31.7 billion).