Dubber Corporation (ASX: DUB) has found itself embroiled in a financial quagmire during its audit process which has prompted the tech company to notify the market that efforts have commenced immediately to locate $26.6 million which was believed to be held in term deposits. It also led to the immediate suspension of Managing Director Steve McGovern while the matter was referred to regulators.
The saga unfolded as part of the audit review for the Company’s Half Year accounts. Dubber became aware of inconsistencies concerning funds held on its behalf by a third-party trustee. A preliminary investigation revealed that funds purportedly held in a term deposit account may have been utilised for other purposes, rendering them currently inaccessible to Dubber.
Approximately $3.4 million of these funds has been recovered thus far, but the Company is actively pursuing avenues to recoup the remaining balance.
As the investigation progresses, Dubber’s maximum exposure stands at $26.6 million. In response to this alarming development, the company has taken decisive action by suspending the employment of McGovern. No allegations of wrongdoing have been made by Dubber at this stage, who has referred the matter to Australian Securities and Investments Commision (ASIC).
To navigate through this turbulent period, Executive Director Peter Pawlowitsch has been appointed as the Acting CEO. Despite these internal upheavals, Dubber assures its global customer base that the delivery of its services remains unaffected. Furthermore, the Company asserts that its forecast revenue range for FY2024 remains unchanged.
This isn’t the first time Dubber has found itself under scrutiny for financial drama, previously exposed to the fallout of the Silicon Valley Bank collapse in 2023 through no fault of their own.
Dubber is a prominent player in conversation intelligence and unified conversational recording. Its platform enables Communication Service Providers to leverage the potential of networks by transforming every conversation into a source of value for innovation, retention, and revenue. With its Artificial Intelligence (AI) capabilities embedded in over 210 Communication Service Provider networks and services, Dubber occupies a significant position in the market.
The Company has stated its intention to provide further updates on any material developments as it continues to work closely with its auditor, Ernst and Young, to finalise and release its 31 December 2023 Half Year accounts.
In their December Quarter update, Dubber reported revenue of $10.7m in Q2 FY24, up 9% on Q1 FY24, and $20.5m for the Half Year ended 31 December 2023, up 50% on the previous corresponding period. The Company reiterated its previously advised expectations for FY24 of revenue of $45m and costs of $65m.
Emily Maxwell is a business writer at The Sentiment with interest in the tech, fintech and retail industries.
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