Dubber fires CEO over $26.6m in missing funds
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The news: ASX-listed software firm, Dubber, has fired its CEO and managing director, Steve McGovern, and alleges that both McGovern and a third party trustee were likely involved in the unauthorised use of $26.6 million in missing company funds.
The numbers: ASIC commenced an investigation on 1 March after Dubber informed the regulator that it had suspended McGovern after $26.6 million in funds were found to be missing.
The context: In a statement released to the ASX after close of trading last night, Dubber alleges that following the company’s investigation into the missing $26.6 million to date, McGovern and the trustee were likely involved in using the funds for purposes which were not for the company’s benefit.
As a consequence, Dubber says it has terminated the employment of McGovern with immediate effect, and that he has also ceased to be a director of the company. Dubber plans to continue its efforts to pursue recovery of the missing funds.
Valued at over $1.2 billion in September 2021, Dubber was valued at under $90 million before trading was halted in early March. Following the trading halt, the AI-powered call recording company announced that it had become aware of "inconsistencies" relating to funds held on its behalf by a third party trustee.
After a preliminary investigation, the firm said: "[We] have uncovered that funds, purported to have been held in a term deposit account, may have been applied for other purposes and are not currently available to the Company."
Of the total $30 million missing funds, just $3.4 million has been recovered, leaving $26.6 million unaccounted for. In late March, ASIC secured a court order barring the suspended CEO and trustee Mark Madafferi, solicitor and principal of North Melbourne law firm, Christopher William Legal, from travelling outside Australia until 13 September 2024, while the corporate regulator carries out its investigation.
Last night's ASX announcement also reads that Dubber is finalising the structure and terms of an equity capital raising to replenish its balance sheet, and expects to announce details later this week. In mid-March, Dubber secured a temporary $5 million secured loan from Alex Waislitz’ Thorney Investment Group, its largest shareholder, for interim funding.
Executive director, Peter Pawlowitsch will remain in the role of acting CEO until a permanent CEO is appointed. Dubber also appointed David Coventry to the role of deputy CEO.
The sources: ASX announcement, Capital Brief
