Nuix CFO poised to step down as fallout from disclosure scandal continues

Nuix financial chief Stephen Doyle is poised to leave the forensic data analytics company barely a fortnight after it issued a second revenue downgrade and following fresh revelations the corporate regulator is investigating the $1.8 billion float of the business.

The Sydney Morning Herald and The Age can reveal that Mr Doyle cleared his desk at Nuix’s Sydney head office shortly after the mastheads published an article that contained details of his share transfers to his brother in tax-friendly Switzerland, and he hasn’t been sighted there since.

Stephen Doyle, CFO at Nuix, set to leave the scandal-ridden company.

Mr Doyle left for Runaway Bay, on Queensland’s Gold Coast, on May 31, the same day Nuix rocked investors with a second downgrade of its revenue forecasts that pushed its shares to a record low.

When asked about Mr Doyle’s employment status, a Nuix spokesperson instead spoke of the “exceptional and committed people” currently employed by the company. Pressed as to whether Mr Doyle was one of these people, the spokesperson did not respond. Mr Doyle also failed to respond to questions about his position at Nuix.

The bean counter’s imminent departure comes as burnt investors call for the removal of Nuix CEO Rod Vawdrey and board renewal after a joint Herald, The Age and The Australian Financial Review media investigation exposed problems with Nuix’s governance and the quality of its financial accounts, years before it floated.

The heavily-hyped float made Nuix’s co-founder Tony Castagna and Mr Vawdrey instantly rich and delivered major shareholder Macquarie Group a $550 million cash windfall. But since then Nuix shares have crashed from a peak of almost $12 to close at $2.65 on Friday - destroying almost $3 billion in market value and leaving the stock 50 per cent below its $5.31 December 2020 issue price.

The decline has left investors baying for blood, with three class action law firms investigating the company for misleading and deceptive conduct or breaches of continuous disclosure obligations.

The marketing campaign ahead of the float by Macquarie has been likened to putting lipstick on a pig with some investors describing themselves as being “stuck with the rancid bacon”.

The savagery and speed of the share price fall has damaged the reputations of Nuix and Macquarie and resulted in the regulator sending notices to both companies warning them to retain relevant documentation stretching back to 2018.

The investigation by ASIC relates to allegations that Nuix overstated its sales forecasts ahead of its listing on the ASX on December 4.

On the very day Nuix made its blockbuster debut on the Australian Securities Exchange, Mr Doyle and his wife Liza Choa-Doyle splashed out $4.6million for a four-bedroom, four-bathroom penthouse in Pyrmont, on the fringes of Sydney’s CBD.

Mr Doyle became CFO of Nuix in 2011, around the time Macquarie became the major shareholder in the company.

In September 2012 Mr Doyle lodged documents with the corporate watchdog ASIC reporting he had been issued with 50,000 Nuix shares costing him $301,500.

However, three years later, in December 2015, Mr Doyle notified ASIC he had sold those same 50,000 Nuix shares to his brother Ross Doyle in Switzerland in July 2012. This was six weeks before he owned the shares.

Despite having apparently sold the shares to his brother for $326,000 some three years earlier, booking a $24,500 capital gain, Nuix continued to produce internal and external documents which showed Mr Doyle still owned the shares up until 2015, when their value had jumped to $4 million.

On the day the company was listed on the ASX in December 2020, Ross Doyle was listed as Nuix’s 14th largest shareholder with 2 million shares, worth $10.6 million at the $5.31 issue price.

The Australian Federal Police is investigating possible breaches of the Corporations Act involving Mr Castagna, who recently had a consultancy contract with Nuix terminated. The investigation is interested in the dating of Dr Castagna’s $3000 options package which delivered him an $80 million windfall when Nuix became a public company in December 2020.

It is not known what Mr Doyle plans to do next but Nuix chairman Jeff Bleich gave him a few ideas in an email in October 2018, obtained by this masthead, just as Nuix completed a $50 million acquisition of US tech group Ringtail. “I’m optimistic about Nuix’s fortunes but if things don’t work for you, then at least your 25 hour-day gives you a shot at the Nobel Prize for expanding the space-time continuum,” he wrote.

Mr Bleich was referring to an earlier email where Doyle said he had endured an exhausting 90 days overseas inking the Ringtail deal. “My longest day was 25 hours straight. Many of us experienced the same iron man conditions…. Keep fit. SD.“