Northern Data accused of fraud by ex-directors amid US IPO efforts

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As an experienced financial analyst, I find the allegations of fraud against Northern Data deeply concerning. The fact that two former executives have come forward with such serious accusations is a clear red flag. If true, these allegations could significantly impact Northern Data’s reputation and its ability to secure funding, including an anticipated IPO.

During its attempts to become a publicly traded company, Northern Data has been hit with allegations of fraud from ex-executives. They claim they were forced out for blowing the whistle on questionable business practices.

As a researcher investigating the latest developments in the cryptocurrency industry, I’ve come across some intriguing news concerning European Bitcoin mining company Northern Data, which has attracted significant attention due to its association with stablecoin issuer Tether. However, this company is currently facing legal challenges as two ex-executives have accused them of dismissal for voicing concerns about potential fraudulent activities within the organization.

In a legal dispute brought before the California Central District Court, two former executives of Northern Data, Joshua Porter and Gulsen Kama, have alleged that the German company headquartered in Frankfurt deceitfully portrayed its financial health to investors, regulatory bodies, and commercial associates. Furthermore, they claim that the organization intentionally evaded taxes, potentially amounting to tens of millions of dollars.

In March 2023, Porter was let go from Northern Data with allegations that the company was on the brink of insolvency and owed significant taxes. Three months later, Kama was terminated and leveled accusations of financial misconduct against CEO Aroosh Thillainathan and COO Rosanne Kincaid-Smith. The Financial Times reported that international auditing firm KPMG had voiced apprehensions regarding Northern Data’s financial situation, ultimately leading to a change in auditors to Liebhart & Kollegen.

As of press time, Northern Data made no public statements on the allegations.

Currently, Northern Data is considering the prospect of launching an initial public offering (IPO) for its merged AI cloud computing and data center businesses in the United States during the next year. According to reports from Bloomberg’s reliable sources, the estimated valuation for this entity ranges between $10 billion and $16 billion. Northern Data is also contemplating the option of selling a portion of the business to investors prior to the IPO.

In September 2023, Tether revealed a partnership with Northern Data aimed at exploring projects in the areas of artificial intelligence, peer-to-peer communication, and data storage innovations. The specifics of the deal, including any financial details, were not shared by Tether. They also denied rumors that they had invested $420 million for 10,000 H100 GPUs from Northern Data.

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2024-07-05 18:27