Phosphagenics releases results of investigation

An investigation into the misappropriation of Phosphagenics (ASX: POH) funds has found that $5.7 million in false invoices has been paid from 2005 until 2013.

Conducted by Deloitte Forensic, the investigation alleges that former chief executive Dr Esra Ogru and five other people were involved in the fraudulent activities.

The company described irregularities in its invoicing and accounting transactions three weeks ago.

Dr Ogru resigned from the company last week.

Phosphagenics stated that it has moved to secure the assets of those allegedly involved and is confident it will recover a substantial part of the misappropriated funds.

The company will also seek compensation from those involved for the cost of the investigation, interest and other losses incurred as a result of the fraudulent activities.

New York-based Executive Director Harry Rosen will remain in Melbourne until the necessary steps for reparation of the funds are in place and a new CEO has been appointed.

“I and my fellow directors cannot aptly describe our profound disappointment in what has occurred,” said Rosen.

Phosphagenics shares had regained most of this month’s lost ground and were trading at $0.115 at about 6 pm on Wednesday.