A biotech company backed by star investor Neil Woodford has admitted it is incapable of policing internal fraud or related-party transactions.
Its annual report also said plans to improve its financial controls were “uncertain”.
Shares in Northwest Biotherapeutics, which is developing a brain cancer treatment, have plunged nearly 90% since last summer.
In October, the US-listed company was labelled a “house of cards” by the investment firm Phase Five Research. It alleged that the chief executive, Linda Powers, had funnelled millions of dollars from the company into other businesses she controls.
Northwest denied wrongdoing and set up a special committee, led by a former justice department lawyer, to investigate the allegations. It has yet to reveal its findings.
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In its latest annual report, Northwest revealed seven “material weaknesses” in its financial controls. It “did not maintain an effective anti-fraud programme designed to detect and prevent fraud relating to an effective whistle-blower programme or other comparable mechanism and an ongoing programme to manage identified fraud risks”.
It also admitted there was a “lack of controls . . . to ensure that all material transactions and developments . . . are properly recorded”.
Woodford spent more than $180m to build up a 25% stake, second only to Powers’ 42%. On Friday his holding was worth $36m (£24.6m). Northwest declined to comment.