FRANKFURT German lighting designer Hess AG HEAG.DE said it had sacked the two members that made up its management board after uncovering fraud that had been going on for a "remarkable period of time".
Hess, which floated in October, said it suspected that non-existent revenue and income had been declared, meaning its financial situation was described too positively.
"The company has probably been, with the knowledge of the management board, in continuous breach of accounting rules for a remarkable period of time," it said in a statement on Monday.
The supervisory board fired CEO Christoph Hess and CFO Peter Ziegler with immediate effect.
Its shares crashed 55 percent after the announcement to 6.70 euros ($8.91), compared with October's issue price of 15.50 euros.
It would be looking into taking legal action to recover damages, it said.
In a statement sent late on Tuesday, the sacked chief executive, Hess, responded by saying he first needed to clarify what wrongdoing he supposedly had committed.
"I was abroad travelling and was completely surprised by this incident. I am only aware of the accusations leveled at me from the press and cannot comprehend them," he said.
"I still have not been told what it is exactly that I have allegedly done nor given me the opportunity to comment," Hess continued, adding he would take steps to defend himself.
(Reporting by Victoria Bryan; Editing by Erica Billingham, Helen Massy-Beresford and Bernard Orr)