Sigma bosses fac­ing prison

Townsville Bulletin - - NEWS -

THE for­mer boss of Sigma Phar­ma­ceu­ti­cals and the com­pany’s chief fi­nan­cial of­fi­cer could be jailed af­ter plead­ing guilty to fal­si­fy­ing the com­pany’s ac­counts.

For­mer chief ex­ec­u­tive Elmo de Al­wis and CFO Mark Smith pleaded guilty at Mel­bourne County Court yesterday to fal­si­fy­ing Sigma’s books af­ter in­flat­ing the prices of medicines bought by the com­pany in 2009.

The cor­po­rate watchdog, ASIC, says the pair also in­di­cated they would plea guilty to charges of giv­ing false or mis­lead­ing in­for­ma­tion to Sigma’s au­di­tors and board.

The pair was charged af­ter the Aus­tralian Se­cu­ri­ties and In­vest­ments Com­mis­sion launched an in­ves­ti­ga­tion into how the men over­stated Sigma’s in­come, prof­its and in­ven­tory be­tween June 2009 and March 2010.

The men or­gan­ised for Sigma to buy whole­sale phar­ma­ceu­ti­cal drugs at in­flated prices, with the in­flated pay­ments re­turned to Sigma and recorded as rev­enue.

They then al­legedly mis­in­formed Sigma’s board and au­di­tors about how the trans­ac­tions were ac­counted for.

Sigma’s net profit was found to have been over­stated by $ 9,599,000 for the year to Jan­uary 31, 2010. Its in­come for the year was also over­stated by $ 15,500,616 and its in­ven­tory by $ 11,313,224.

The com­pany’s

shares plum­meted when Sigma, which owns the Am­cal and Guardian phar­macy chains, re­ported a net loss of $ 390 mil­lion for the 2009/ 2010 fi­nan­cial year in March 2010.

The men, who re­signed from Sigma in 2010, will next face court on Septem­ber 17.

They each face a max­i­mum penalty of $ 11,000 or im­pris­on­ment for two years, or both, for fal­si­fy­ing Sigma’s ac­counts.

They could also face fines of up to $ 22,000 or five years’ jail, or both, if they plead guilty to giv­ing mis­lead­ing in­for­ma­tion to Sigma’s board and its au­di­tors.

Sigma said the com­pany had fully co- op­er­ated with ASIC dur­ing its in­ves­ti­ga­tions and that no charges had been laid against it or any of its other cur­rent or for­mer ex­ec­u­tives or non- ex­ec­u­tive di­rec­tors.

“This mat­ter will have no im­pact on Sigma’s on­go­ing busi­ness,” Sigma said in a state­ment.

For­mer CEO Elmo de Al­wis.

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