Fallen ASX darling Nuix Ltd (ASX: NXL) is dealing with yet another crisis, with the former chair's share options now under investigation by the authorities.
The Australian Federal Police (AFP) on Tuesday afternoon confirmed that a probe into the technology company and co-founder Tony Castagna had started.
"The Australian Federal Police can confirm an investigation is underway in relation to potential offences under the Commonwealth Corporations Act," a police spokesperson told The Motley Fool.
"As this investigation remains ongoing, it would not be appropriate to comment further."
The exact nature of the allegations was not disclosed by the federal police.
According to the Sydney Morning Herald, the inquiry is looking into Castagna's $3,000 options package that he supposedly acquired in 2005.
Those options returned him $80 million when he sold them as Nuix listed on the ASX last December.
The newspaper's own investigation revealed these options are not mentioned anywhere in company records between 2005 and 2011.
Castagna's options were first recorded only in 2011 after Macquarie Group Ltd (ASX: MQG) invested $10 million into the fledgling data analytics provider.
Under the Corporations Act, lodging backdated or otherwise false documentation with corporate regulators can potentially be a criminal offence.
The Motley Fool has attempted to contact Nuix for comment.
Who is Tony Castagna?
Castagna was jailed in 2018 for avoiding tax and money laundering. He was acquitted a year later.
The former chair returned to the board after his release but departed in November without fanfare just before the initial public offer (IPO) prospectus was released.
The Nuix share price almost doubled its IPO price upon listing and was still flying high at $8.97 in late February. But the market has since punished it for a series of poor financial updates that made it apparent it would not meet prospectus forecasts.
The stock traded for $3.44 after market close on Tuesday, which is well down on the IPO price of $5.31.
Its woes were compounded in the past fortnight with a series of articles in the Sydney Morning Herald that accused the company of poor governance and hiding Castagna's prominent role.
Nuix was forced to respond to the newspaper articles via a statement to the ASX last week.
"Tony Castagna was a founder of the company and a large part of its success," the board stated.
"Mr Castagna was acquitted of charges relating to his personal tax affairs in 2019. He has provided consulting assistance to the company."
On Monday, the company responded to investor pressure in appointing additional independent board members and setting up a governance oversight subcommittee.