Hey all,
On my reading, isn't it the legal firm who have done the wrong thing here? I thought i recalled that this trust deposit was required to placate the bigger IT firms with whom Dubber deals, to give them a comfort level that the company was well funded. The money was supposed to be in a Trust account on Dubber's behalf under the auspices of the legal firm's trusteeship, and available on 30 days' notice.The wrongdoing here is that the legal firm appears to have done something with the funds other than just hold it - maybe invested or otherwise, and as such it is not available at present.
Granted this has all happened on Steve McGovern's watch, and the CEO is ultimately responsible. It's not the first strike, and I fully back his suspension. But let's not hang people for fraud or otherwise until we get all the facts. It's possible, for instance, that the law firm has gone off and invested the trust funds for financial gain (contrary to their powers and illegally), and it's going to take some time for them to liquidate the investment and return the money. In which case we should get it all back. It's also possible one of the legal partners has a gambling habit and has lost the lot. The point is we don't know yet, and certainly don't know who is culpable.
I tend to agree that given the size and materiality of the deposit to Dubber's wellbeing, the auditor should have confirmed the deposit at June 2023 in the audited FY accounts and done due diligence on it's availability at that point. Assuming they did, then this has only occurred since June last year, and Dubber may not have had daily visibility over the legal firm's trust account. You would like to think a law firm's trust account was sacrosanct and could be relied upon. Again to me it's the legal firm at fault and if so they are in very hot water.
Am I being too kind on our finance team? Maybe........
All my surmising of course, and it's very gut wrenching to be sure. The silver lining is it's a golden opportunity to move Steve on and appoint a more high powered CEO. I just keep my fingers and toes crossed we can recover the full balance of $26m. Troubled times ahead if not.
Cheers
Spike
Expand
