Two former executives of Northern Data, a major European miner, are suing the company, claiming they were fired in retaliation for exposing alleged internal financial audits, tax evasion and securities fraud, the Financial Times reported. They emphasized that the company may be on the verge of bankruptcy if it is required to pay tens of millions of dollars in evaded taxes.

Northern Data was fired in retaliation from former executives for telling too much truth

Northern Data, which owns Bitcoin mining and artificial intelligence cloud computing businesses, was sued last month by former executives Joshua Porter and Gulsen Kama for wrongful dismissal. They pointed out in recently disclosed legal documents that the company allegedly sold investors He concealed and deceived his true financial status and evaded more than tens of millions of dollars in taxes.

He evaded tens of millions of dollars in taxes and will face bankruptcy if he pays back taxes.

First, Porter, as the chief operating officer of Northern Data’s U.S. branch, learned the company’s true financial status after being promoted to CEO:

The company has $30 million in back taxes due in Germany and nearly $8 million in liabilities. However, the company has only $17 million in cash on its books and monthly costs of $3 million to $4 million.

At the same time, he also pointed out that in the face of increasingly clear encryption tax laws in the United States, Northern Data executives did not change its operating structure or tax system, but instead took action to illegally evade taxes on its mining profits:

The plaintiff is concerned that the company's U.S. tax evasion amount may exceed tens of millions of dollars, and the company may face bankruptcy if it is fined by the U.S. Internal Revenue Service (IRS) and required to make back payments.

Porter also reported this to the CEO of the parent company and asked to report it to the board of directors, but was fired in retaliation.

Deceiving investors and partners

In addition, Gulsen Kama, as the chief financial officer of the U.S. branch, actively reported concerns about financial accounting and securities fraud to CEO Aroosh Thillinathan and chief operating officer Rosanne Kincaid-Smith, but the company still turned a blind eye:

The CEO and COO still lied about its financial status to investors and business partners at a mid-June meeting in an attempt to hide the fact that it was close to bankruptcy.

The document reads:

The plaintiffs were fired after warning Northern Data of flagrant violations of securities and tax laws and trying to ensure the company would not continue to make fraudulent statements about its audit procedures.

Porter and Kama are seeking damages for wrongful dismissal and are concerned they may face criminal liability for the company's illegal conduct.

Last Monday, the company just expressed its intention to conduct an initial public offering (IPO) on the U.S. Nasdaq exchange next year, valuing the company at as much as $16 billion.

(Northern Data, a large European miner, intends to list on Nasdaq in 2025, with a valuation of US$16 billion)

Northern Data: False accusations, refuses to comment

In response, Northern Data denied the accusation and stated that it would vigorously defend itself:

As a listed company, we ensure the accuracy of our financial reports through comprehensive policies and procedures, and the 2023 audited financial report will be released soon.

In addition, Tether, a stablecoin issuer that is the company’s main investor and owns 51% of its shares, did not respond positively:

We reaffirm our commitment to our investors and stakeholders to operate with the highest standards of integrity and transparency while maintaining confidence in the company's long-term potential.

NB2.DE fell more than 23% on the day

Following the news, Northern Data stock (NB2.DE) lost 23.1% of its value on Friday's final trading day.

The stock price has fallen more than 39.7% from its recent high when the IPO was announced on July 2, and the company's market value has also evaporated by $523 million in the past week.

This article just announced the intention to IPO! Miner Northern Data was exposed by former executives as being on the verge of bankruptcy and evading tens of millions of dollars in taxes. First appeared on Chain News ABMedia.