Esra Ogru, the former chief executive of Melbourne based biotech company Phosphagenics, is facing criminal charges over an alleged $6 million fraud.
The Australian reports Ogru has been charged with nine offences over the misappropriation of funds from Phosphagenics, including four charges of dishonestly obtaining money, three charges of conspiracy to dishonestly obtain money and two charges of using her position as a company director to dishonestly obtain money.
The penalties for each charge range from a fine to a custodial sentence.
Phosphagenics shares were placed in a trading halt and Ogru was dismissed by the board after Phosphogenics uncovered “irregular transactions” in relation to its invoicing and accounting records in July last year.
“The company believes that the amount involved may be material. The company has retained independent legal and accounting professionals to undertake a thorough and extensive investigation,” Phosphagenics said in a statement to the ASX at the time.
Phosphagenics claims $6.33 million was misappropriated by Ogru over eight years in a scheme which involved issuing false invoices and overstating research and development expenses.
David Segal, head of investor relations at Phosphagenics, told SmartCompany the company has recouped $1 million from its former chief executive.
A further $1.3 million is expected to be repaid following the sale of Ogru’s family home.
“We’ve already told the market it has been business as usual since and we had some exciting clinical results late last year and our programs are moving forward this year,” Segal says.
“It has been great credit to the staff that they haven’t been distracted from getting on with the business of proving our technology, which has made some significant breakthroughs in the last 12 months.”
Segal says Phosphagenics is trying to put the alleged fraud behind it and is focused on moving forward.
“It’s not one of the normal things you’d anticipate you have to deal with, from a shareholder and investor relations point of view it’s been a challenge,” he says.
Phosphagenics annual report showed sales revenue last year fell 19% to $2.2 million recording a loss of $12.7 million.