Dubber raising as CEO sacked

Software company Dubber will undertake a $24m capital raising that is expected to help cover the cost of the fallout from the alleged misuse of its funds by former chief executive Steve McGovern.

The company terminated Mr McGovern’s employment on Tuesday after undertaking an investigation into his alleged misuse of more than $20m of its funds.

Dubber told the ASX on Wednesday that it was undertaking a fully underwritten capital raising to raise about $24.06m by way of an institutional placement and an entitlement offer.

It said it intended to use the funds for additional working capital, bringing ordinary business creditors back into normal payment terms, and “the costs associated with the company’s financial investigation”.

The raise will also repay Thorney Investment Group, Dubber’s largest shareholder, which has committed to take up $2m of its institutional entitlement and sub-underwrite up to $7m of the retail component of the entitlement offer.

Dubber has reduced its revenue guidance from $45m to $38.1m-$41.6m due to the removal of revenue associated with a disputed $1.7m contract and revenue delays.

The money scandal was made public last month when Dubber revealed that it had uncovered that company funds, which were supposed to have been held by a third party trustee in a term deposit on behalf of the company, may have been allegedly misused by either or both Mr McGovern, who was suspended pending an investigation, and the trustee.

Dubber on Wednesday said $60m of funds were deposited between mid 2019 and August 2021 into the trust account,

On Wednesday at the conclusion of the investigation, Dubber told the ASX that $26.6m remained unaccounted for and was likely misappropriated.

Dubber said the results of the investigation are reflected in the company’s consolidated financial statements for the six months ended December 31, 2023.