Nuix CEO and CFO step down after disastrous IPO

Embattled technology company Nuix has announced the departure of its chief financial officer and chief executive officer as it attempts to move on from a damaging disclosure and governance scandal.

As foreshadowed by The Sydney Morning Herald and The Age this week Nuix announced to the market on Tuesday morning that its CFO Stephen Doyle was being “terminated by mutual agreement.” Only half an hour later, a second bombshell followed with the announcement that CEO Rod Vawdrey had given notice of his decision to retire.

Nuix CEO Rod Vawdrey ringing the bell to announce Nuix’s public listing on the ASX.Credit: Ben Rushton

Their departures follow a joint investigation by The Sydney Morning Herald, The Age and The Australian Financial Review which exposed serious culture and governance issues, missed sales forecasts and a previous attempted coup to oust Mr Vawdrey.

Nuix provides the software platforms that regulators, police investigators and tax officials around the world use to run top-sensitive investigations.

The company’s shares took off like a rocket when it floated last December, more than doubling its share price. Macquarie Group booked a half-a-billion dollar profit when it used the float to sell down its stake in Nuix from 76 percent to 30 per cent.

But only months after the float the share price had crashed 65 percent, wiping $2.4 billion from the company’s market value and seeing angry investors consulting with class-action specialists.

The board’s decision to cut ties with both executives comes barely a fortnight after the company issued a second downgrade to its sales forecasts and following fresh revelations the corporate regulator is investigating the $1.8 billion float of the business.

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.

Stephen Doyle, CFO at Nuix, has been “terminated” by the board. Credit:

The writing was also on the wall for the CEO, Mr Vawdrey. Nuix chairman Jeff Bleich, who has been on the board for more than four years, said in a statement Mr Vawdrey’s decision to retire reflects his “love for the company.” Mr Vawdrey’s “deep commitment” to the company means he will stay on until his replacement can be found, Mr Bleich said.

Mr Vawdrey survived an attempted coup in April 2019 when six senior Nuix executives prepared a presentation titled “Nuix 2.0” to the Nuix board which said: “Nuix has lost focus, lost customer-centricity and stopped innovating” and had a “toxic, no-trust culture where acting in the interests of the ‘greater good’ of Nuix has been lost,” and “accountability [was] always shifting”.

The departures of Mr Doyle and Mr Vawdrey follow the Nuix board cutting ties with co-founder Tony Castagna, who was the controlling force behind Nuix even whilst he was in jail.

Dr Castagna pictured outside court in 2018.Credit: Janie Barrett

Both Mr Doyle and Mr Vawdrey, along with Macquarie-appointed Nuix directors David Standen and Dan Phillips, beat a regular path to visit Dr Castagna who was jailed in 2018 for money laundering and tax evasion.

After a little over a year in jail, Dr Castagna’s sentence was overturned on appeal. Mr Standen and Mr Phillips had no hesitation in welcoming Dr Castagna back onto the Nuix board.

However, on the same day the prospectus for Nuix’s initial public offering was launched in November 2020, Dr Castagna quietly stepped down as a director. His entire career at Nuix, including his new role as a consultant, was reduced to two footnotes which simply recorded his offshore company’s shareholding in the company.

Last month these mastheads revealed apparent gaps in the records of Dr Castagna and Mr Doyle’s respective shareholdings in Nuix.

Although concerns about Dr Castagna’s options package had been previously raised with Macquarie, who referred the issue back to the Nuix board, it wasn’t until the mastheads revealed that the Australian Federal Police was investigating possible breaches of the Corporations Act that the board finally severed ties with Dr Castagna.

Company insiders said Mr Doyle’s days with Nuix were numbered after the profit downgrades and the media’s revelation that he had taken several years to lodge documents about his sale of shares to his brother in Switzerland.

Stephen Doyle’s share transfersCredit: Michael Howard

Mr Doyle, who joined Nuix in 2011 after Macquarie came on board, lodged a document with ASIC in September 2012 reporting he had paid $301,500 for 50,000 Nuix shares.

However, it wasn’t until December 2015 that he notified ASIC that he had sold those same 50,000 Nuix shares to his brother Ross Doyle in tax-friendly Switzerland some three years earlier in July 2012. This was six weeks before he owned the shares.

The confusion about the ownership of the shares continued. In 2018 when an internal Macquarie document included a table listing key Nuix shareholders. On the list was Stephen Doyle, not Ross, owning 2 million shares.

With Colin Kruger

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