The announcement followed an investigation by forensic accounting company Deloitte, who claimed to have identified theft by six people including Dr Orgu.
The former CEO was suspended from the board on July 1 when irregularities were noticed in Phosphagenic’s invoicing and accounting records. She handed in her resignation effective from July 18.
According to Phosphagenics, the thefts involved the payment of funds: “in respect of false invoices.”
The company has stated: "Dr Esra Ogru has been dismissed by the board as an employee of Phosphagenics.
“The company alleges that she is implicated in and has benefited from the misappropriated funds."
Phosphagenics has not yet appointed a new CEO. Operations are currently being managed by founder and second-largest shareholder Harry Rosen, who will remain in Melbourne until the investigation is concluded.
Phospagenics is currently pursuing legal action with an unnamed firm in an attempt to recover the funds.
According to Australian paper Business Day they have also put caveats on property owned by Dr Ogru, including her family home in Melborne and $1 million beachside house in Portarlington, with a total value of $2.3 million.
Phosphagenics have stated that are confident that they will be able to recover a substantial proportion of the stolen monies. They are also commissioning a full review of internal systems and authorizations to ensure that a similar event cannot occur again.
Future of the company
In a statement to the Australian Stock Exchange, Mr Rosen said: “the company is confident that it will receive substantial restitution and compensation from the various parties responsible for the misapprehensions.”
“Further, when restitution is made, our cash resources should increase significantly from the $14.1 million cash holdings recently announced.”
“Despite this, I and my fellow directors cannot aptly describe our profound disappointment at what has occurred.”
Following the dismissal, company shares went down 4.6 percent, to 10.5 cents. Shares have since returned to their previous value of 11cents.
Phosphagenics produce a variety of cosmetics, cosmeceuticals and pharmaceuticals for international markets. They are currently collaborating with the U.S. Department of Agriculture in producing a treatment for mastitis in dairy cows.
In partnership with Le Metier de Beaute, the company launched the Peau Vierge range of anti-ageing products in US stores in November 2009.