Diligent halted pending report on executive options, may have to restate accounts

Tuesday 19th February 2013

Diligent Board Member Services was halted from trading on the NZX pending a report into stock options granted to chief executive Alessandro Sodi and other employees that may force the company to restate earnings.

The company, whose shares have more than doubled in the past 12 months, set up a special committee in December after being notified that some options and shares granted to executives may not have complied with the relevant incentive plans.

Last month Diligent said the committee had found that a 2009 award to Sodi exceeded the cap in the 2007 Plan by 1.6 million shares and a 2011 award exceeded the cap in the 2010 Plan by 2.5 million shares. A 2011 award to another executive exceeded the cap in the 2010 Plan by 250,000 shares.

The committee also identified a number of instances where Diligent may not have been in compliance with New Zealand regulations such as granting stock options to employees in the absence of a prospective.

The company said it was advised late yesterday that it was likely to get a report today from an accounting firm which may result in the Diligent board "restating its accounts for the 2012 year and some prior years," it said today.

"This relates to the impact of cancelling certain stock options issued to certain executives under Diligent's 2007 and 2010 stock option and incentive plans," it said.

The board would urgently review the report and update the market as soon as possible, it said.

Shares of Diligent, which provides software applications to assist company directors that are available on the iPad, last traded at $5.35 on the NZX.

The stock is trading at a price-earnings ratio of about 45 and is one of the best performers on the NZX in recent years. The stock traded at just 10 cents in March 2009.

BusinessDesk.co.nz

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