Bytes clamps down on former CEO over share trading saga

Neil Murphy, the former long-time boss of Bytes Technology has agreed to let go of his share options from the group and pay back bonuses as part of a settlement following his untimely departure earlier in the year due to a share trading scandal. 

In February the UK firm, which was spun out of Altron in 2020, said Murphy had notified the board that he had made a number of trades in the company’s shares that had not been disclosed to either it or the market as required by listing rules.

CEOs, CFOs, directors and senior managers who have access to inside information about a publicly traded company are required to declare when they make trades in their own shares. The rules are in place to prevent insider trading and ensure market transparency.

Since then the company launched an urgent investigation into the matter. 

On Thursday, the group said it had concluded that investigation and found that no evidence that Murphy’s share dealing involved any other parties, “nor any evidence of a wider pattern of misconduct by Mr Murphy impacting or implicating any of BTG’s staff, customers or suppliers. Mr Murphy has expressed profound regret for his failure to comply with regulations and the impact of his actions on both BTG and his former colleagues.

“The group has reached a settlement with Murphy whereby he has agreed to, first, forfeit his entitlements under the company’s performance share plan and deferred bonus plan in their entirety, meaning that no further amounts will be received by Mr Murphy under these schemes.”

Murphy will also repay his after-tax bonuses since the IPO to the company, through Bytes’ clawback provisions.

Bytes is listed in Johannesburg and London.

The group’s preliminary investigation found that Murphy had engaged in unauthorised and undisclosed trading of Bytes shares on 66 trading days between January 2021 and November 2023, totalling 119 transactions.

The company was caught unaware by the revelations. It had conducted an unrelated share-dealing disclosure investigation in 2023, in which Murphy’s transgressions went undetected.

Details of more unauthorised transactions involving his wife have since emerged.

Last week, Sam Mudd was appointed CEO of Bytes with immediate effect. 

Mudd has more than 20 years’ experience in leadership positions, has served as an executive director since July 2023 and was the interim CEO of the company from February.

The group has also used the investigation to examine its procedures for monitoring and reporting the shareholdings of directors, saying it has undertaken a detailed review and reconciliation of the shareholdings of current and former directors.

“Minor discrepancies” have been found, which results in restatements being made in the group’s annual report. 

gavazam@businesslive.co.za