Danish software company goes bankrupt as CEO vanishes
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Danish software company IT Factory has filed for bankruptcy and its CEO, Stein Bagger, has disappeared, wanted by Interpol.
IT Factory won several business prizes this year. Financial figures appeared to be very impressive, with the company reporting that sales skyrocketed 138% since 2007.
But over the weekend, company Chairman Asger Jensby discovered that something was wrong, and Monday filed for company bankruptcy. Jensby now estimates that about 90% of the company's turnover has been fictitious.
Investigative reporters from Computerworld Denmark have looked into the company over a period of several months and published a number of critical stories less than a week before Bagger's disappearance. IT Factory, which develops software as a service, had cited a large real estate agency, Home, as one of its customers. But it appears that this customer consisted of Stein Bagger's wife and her real estate offices, rather than all branches of Home, as was stated on IT Factory's website.
In addition, it appears that IT Factory leased non-existent IT products for millions of Danish kroner, generating fictitious invoices. The company showed authentic-looking invoices to leasing companies, which then paid them. IT Factory also put money in foreign bank accounts belonging to non-existent companies.
Last week Bagger and his wife left on holiday for Dubai, but while there disappeared and did not return to their hotel. No one has seen him since, and according to local authorities he has left Dubai.
Earlier this year, Bagger told Computerworld Denmark that he expected sales figures around 1.5 billion Danish kroner (NZ$463 million) and EBITDA of 300 million Danish kroner. The company has 139 employees.
The largest Danish bank, Danske Bank, stated in a stock exchange release that IT Factory has debts in the bank of 350 million Danish kroner.