Dubber Investigates North Melbourne Law Firm Over $30M Funds Misapplication

Dubber probes a $30 million shortfall involving Christopher William Legal, amid financial inconsistencies leading to CEO's suspension.

Geeta Pillai

03 Mar 2024 04:00 EST

Follow Us

Dubber Investigates North Melbourne Law Firm Over $30M Funds Misapplication

Dubber, an ASX-listed call recording software group, is probing the involvement of a North Melbourne law firm in the misapplication of its funds, following a warning to investors about a $30 million shortfall. The firm, Christopher William Legal, reportedly acted as a third-party trustee for these funds, which are now said to be "not currently available to the company." Dubber's investigation comes after the suspension of its CEO, Steve McGovern, due to discovered financial inconsistencies.

Initial Discovery and Response

The anomaly in Dubber's accounting was identified during the preparation of its half-year financial accounts, leading to a voluntary suspension of its shares last week. The company's chairman, Neil Wilson, announced the suspension of CEO Steve McGovern on Friday, following the audit review's detection of inconsistencies in the management of funds by a third-party trustee. Although approximately $3.4 million has been recovered, Dubber is actively seeking the whereabouts of the remaining $26.6 million.

Investigation Into Christopher William Legal

Despite no allegations of illegal activity, Dubber is scrutinizing the actions of Christopher William Legal in the handling of its funds. The law firm, which has not been reachable for comment, is under investigation for its role as a custodian of Dubber's funds, some of which were purportedly used for "other purposes." This incident highlights the risks associated with third-party fund management and the importance of rigorous oversight.

Market Impact and Future Steps

The revelation of the funds' misapplication has raised concerns among investors and stakeholders, reflected in the suspension of Dubber's shares. The company is in the process of conducting a thorough investigation to ascertain the full scope of the issue and to implement measures to prevent similar occurrences in the future. The outcome of this investigation and the recovery of the lost funds will be crucial for restoring investor confidence and ensuring the company's financial stability.

The situation with Dubber and Christopher William Legal serves as a cautionary tale for companies on the importance of diligent oversight of third-party trustees. As the investigation unfolds, it will be imperative for Dubber to transparently communicate its findings and corrective actions to its stakeholders, aiming to rebuild trust and safeguard against future financial discrepancies.