Dubber gets a new CEO – but is still missing $26 million

ASX-listed conversation insights platform Dubber (ASX:DUB) is hoping to put a horror six months behind it with the appointment of a new CEO, Matthew Bellizia, replacing former boss Steve McGovern, who was sacked in April amid an ongoing investigation into $26.6 million in missing company funds.

Bellizia takes the helm today, having spent 21 years as  cofounder and CEO of Mobile Tracking and Data (MTData), the transport logistics software platform acquired by Telstra in late 2017. He remained as CEO until August 2023, whilst A2B Australia bought MTData’s taxi tech business in 2018 where Bellizia continued to consult until June 2024.

Dubber chairman Neil Wilson said Bellizia has the skills and experience to lead the company to its target of operating cash flow break-even in FY25.

“Matthew has a deep understanding of the importance of data to drive business outcomes which aligns to the Dubber solution current and future solution direction,” he said

Acting CEO Peter Pawlowitsch will return to his previous role as part-time executive director as Bellizia takes charge.

Dubber has been in a world of pain since February as the voice data tech company prepared to release its half-year results and revealed $30 million, supposedly in a term deposit, had gone missing and “may have been misused by either or both” the former CEO, McGovern and the trustee, lawyer Mark Madafferi, principal of North Melbourne law firm, Christopher William Legal.

While $3.4 million was recovered, $26.6 million remains missing and the company said the money remains “unaccounted for and likely have been misappropriated and lost”.

The missing funds wiped out around a third of Dubber’s total assets.

Releasing its FY2024 figures last month, the company posted a 30% growth in total global revenue to $38.6 million.

As part of the results the company said it’s like that both McGovern and Madafferi were “involved in the unauthorised use of the Company’s funds and had been using some or all of the funds for their own purposes” .

“This included making payments to multiple third parties and entities,” Dubber wrote.

“Recipients of payments included certain personnel of the Company or entities or individuals associated with them, which warranted further investigation, however no conclusive evidence has been identified to-date that any individual connected to the Company other than Mr McGovern was involved in the likely misappropriation of funds.”

The group recorded a loss before income tax of $40,804,691 (FY23: $73,298,967), a reduction in loss of 44% on FY23.

Finance costs increased 243% to $4.14 million, principally reflecting the borrowing arrangement costs for the bridging loan facility provided by the Thorney Group.

Thorney’s Alex Waislitz was an existing investor in Dubber and had increased his stake in Dubber to 14.37% just weeks before details on the missing funds emerged. He subsequently provided a $5 million bridging loan and increased his shareholding to 19.9%.

Dubber took another hit over transactions undertaken through the trust account that it was not aware of and which were therefore not recorded. They involved 2022’s trading figures and earlier financial years and could involved in a cumulative understatement of operating losses of $4,607,142 over that period.

The company is still considering recovery actions again McGovern, Madafferi and/or Christopher William Legal and has made a claim on the Victorian Fidelity Fund, which provides compensation for loss caused by dishonest or fraudulent behaviours of a lawyer.

Despite Dubber’s travails Matthew Bellizia said he’s excited to be taking on the CEO role.

“Dubber has a number of key fundamental attributes, including strong customer retention and a technology platform with over 225 communication service provider relationships to deliver its exciting conversational intelligence products,” he said.

“It presents a unique opportunity to build from this strong base and streamline the business to align with the company’s dual objectives of growth and profitability.”

Bellizia has plenty of incentive to lift Dubber’s share price, which began its slide from a 12-month high of $0.25 cents in March, and has bounced along at around $0.03 cents since trade was reinstated after being suspended for several weeks, receiving around 6.6 million shares, worth around $200,000, at sign on, with another 36 million in options up for grabs over the next three years.