Software firm fires CEO, says $26m is still missing

An ASX-listed software company has fired its chief executive and announced plans for an emergency capital raising at a massive discount to replace millions in funds it says were misappropriated.

Dubber Corp on Wednesday accused its former chief executive and managing director, Steve McGovern, and trustee Mark Madafferi, the principal of Christopher William Legal, of "likely" misappropriating $30 million and presenting false documents to cover their tracks.

About $3.4 million had been recovered with $26.6 million still outstanding, the call recording company told the ASX.

Mr McGovern was also a founder of the company with two others.

The company and the Australian Securities and Investment Commission are separately investigating the alleged misuse of funds.

The commission revealed on March 22 that it had slapped Federal Court orders on Mr McGovern and Mr Madafferi preventing them from leaving the country, fearing they ``may have breached the Corporations Act in respect of the suspected misuse of term deposit funds of Dubber Corporation".

Dubber Corp has told the ASX that it would hold a capital raising at a 77.3 per cent discount, seeking to raise $24.06 million for working capital.

The Melbourne-based software company said that its board discovered on February 27 that company funds that were supposed to be held in a term deposit on its behalf may have been misused.

Dubber said it had an account with third-party trustee Christopher William Legal and transferred $60 million into it between mid-2019 and mid-2021.

However, the company said an investigation found many unauthorised transfers out of it.

"Documents that were likely falsified were presented to the company and its external auditor to support the ongoing existence of the term deposits," Dubber said.

"A total of $26.6 million remains unaccounted for, likely misappropriated by Mr McGovern and Mr Madafferi for unauthorised purposes, including payments to multiple third parties and entities."

Mr McGovern did not immediately respond to a LinkedIn message. An email to Christopher William Legal was returned undelivered by its mail system.

ASIC has revealed that Mr McGovern and Mr Madafferi had not opposed the Federal Court's restraint orders and that they would be in place until September 13.

The matter has also been referred to the Legal Services Board of Victoria, Dubber said.

Dubber's executive director, Peter Pawlowitsch, has been appointed acting CEO until a permanent replacement can be named.

Dubber said the unauthorised payments included transfers to other company personnel and entities related to them, but no conclusive evidence had been found that they were involved in the misappropriation of funds.

The evidence "currently available" also does not support disciplinary action against other company employees, Dubber said.

Dubber would have a market capitalisation of $45 million at the offer price of the capital raising.

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