Investor MXC Capital has claimed to be "shocked" at news of Redcentric's misstated accounts, branding accounts misrepresentations "every investor's worst nightmare".
But the merchant bank, which has close ties with the firm, said it believes in the business and today purchased more shares in the firm.
Redcentric announced yesterday that its CFO has left with immediate effect after the firm discovered misstatement of its account balances, which it expects to lead to a profit write-down. It is now carrying out a forensic review and will update the market in due course.
MXC Capital was co-founded by Tony Weaver, who used to be Redcentric's CEO, before stepping into the role of non-exec director last year - a role he left at the end of last month to focus on MXC.
MXC today announced that when news of the misstatement broke yesterday, it bought 7.6 million shares in Redcentric at an average price of 59.68 pence per share. Including MXC's existing shareholding, it now holds 5.2 per cent of its issued share capital.
Peter Rigg, chairman of MXC Capital, said: "We are shocked by the recent developments at Redcentric; accounting misrepresentations are every investor's worst nightmare. Despite this setback, we strongly believe in the fundamental quality of Redcentric's business and remain confident of its future prospects.
"With swift action, we believe that value can be restored in Redcentric and MXC will seek to take an active role in this process."
Redcentric's share price fell by more than two thirds in the immediate aftermath of the announcement yesterday morning. Shares closed at £1.50 on Friday night, and dropped as low as 44p yesterday morning. Today (8 November 10:30am) Redcentric shares are worth 73.07p.
Chief exec Jens Montanana claims Logicalis performed well despite 'currency headwinds'
All the photos from last night's event, which saw over 600 people congregate at the Hilton London Bankside
Five year deal with Essex NHS Trust will cover 400 sites, including hospitals, clinics and GP practices
18 individuals and three companies walked away as winners at CRN's inaugural Women in Channel Awards last night