Darktrace hires EY after attack by short-sellers

DArKTrACE has launched a review of its finances as it fights to reassure investors following a damaging attack by a notorious short-seller.

The cyber-security business said it has appointed specialists at Ernst & Young to pore over its ‘key financial processes and controls’.

Chairman gordon Hurst said the company’s board ‘believes fully in the robustness of Darktrace’s financial processes and controls’, adding: ‘As a sign of that confidence, we have commissioned this independent third-party review.’

Quintessential Capital Management last month said it was ‘deeply sceptical’ about the company’s financial statements and warned the group may have ‘overstated’ sales and profits.

The new York-based hedge fund – run by former Israeli special forces paratrooper gabriel grego – even accused the London-listed company of doing business with ‘shell companies in offshore jurisdictions manned by individuals with ties to organised crime, moneylaundering and fraud’.

The 69-page report sent Darktrace shares crashing to a record low of 210p – well below the 250p mark they listed at in the firm’s April 2021 Initial Public offering (IPo).

In a 1,200-word defence at the start of this month, Darktrace chief executive Poppy gustafsson branded Quintessential’s

allegations ‘unfounded inferences’.

Darktrace insisted it has ‘rigorous controls in place’ and launched a £75m share buyback to boost its share price.

The stock has rallied – and rose 3.5p to 272.1p yesterday – but remains more than 70pc below the 2021 peak of 985p.

Broker Jefferies, which led Darktrace’s public offering, yesterday said the company had ‘handled recent newsflow extremely well’.