MGT Capital Investments, the parent of computer-aided detection (CAD) firm Medicsight, has established a special committee to investigate potential misappropriation and/or misdirection of company funds.
MGT said that Medicsight has also launched a similar investigation. Pending the outcome of the investigations, Medicsight CEO Allan Rowley has been suspended from his executive responsibilities effective immediately. Robert Ladd, Medicsight nonexecutive director and interim MGT CEO, will assume the role of Medicsight interim CEO until investigations are concluded.
Medicsight also announced that Steven Harris, a recently appointed nonexecutive director, has tendered his resignation from Medicsight's board effective immediately.
While MGT said it's too early to determine the outcome of the investigations or their financial impact, if any, to the company, its management believes that no potential wrongdoing took place before the current board was constituted and current MGT officers were appointed on February 7.
MGT said it will pursue recovery and/or restitution if the investigation results in any finding of wrongdoing. Pending clarification of the company's financial position, Medicsight has also received a temporary suspension of trading of its ordinary shares on London's AIM stock exchange.
In other news, the company has been granted a one-week extension by the NYSE Amex stock exchange to submit a plan demonstrating its ability to regain compliance with the exchange's listing standards within an 18-month remediation period. MGT said it intends to submit such a plan by July 15.
NYSE Amex has also initiated a trading halt, to be evaluated on a day-to-day basis, pending resumption of trading of Medicsight shares on London's AIM exchange and/or the progress of the investigation, according to MGT.
