abc learning interim net profit up 62 percent, page-51

Really getting the sheets from company management now. Did a little research and came across this article from the Daily Telegraph on 29th Jan 2008, titled "AS EASY AS ABC IF YOU RULE THE SANDBOX" and writte by Liam Walsh

Surely if dodgy accounting is involved with ABC then the likes of Lazard - big US investment bank and Temasek - one of the largest funds in the world, would have picked it up. Presumably because of their positions they will only employ the brightest business brains around, and if insigifnicant analysts have picked up the issue then they must've considered it as well.

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"Childcare king Eddy Groves has many business ties beyond the sandpit, as LIAM WALSH reports

ABC Learning Centres chief executive Eddy Groves made a rare appearance among the crowd watching his Brisbane Bullets basketball team take on the Gold Coast Blaze last September.

Usually, the corporate childcare giant gets too nervous to attend games.

But he applauded that night as the Bullets fought back to win 115-105.

Anyone looking closer as the Bullets thundered down the court might have noticed other links to Groves.

Publicly-listed ABC Learning, in which Mr Groves is a 4per cent shareholder, is a Bullets sponsor.

Other sponsors including ABC's outgoing auditors and its financial advisers.

While there's no suggestion of anything illegal, it's an indications of how many companies and businessmen have ties to Mr Groves' world. And some investors dislike it.

ABC shareholder Jit Mau recently slammed the lack of a tender process in relation to Queensland Maintenance Services, which in fiscal 2006 handled $74 million in untendered work for ABC maintenance and centre renovation. Its sole director is Frank Zullo, Mr Groves' brother-in-law.

ABC argued QMS was the only operation capable of speedily handling the work and its staff had the necessary police checks.

Work was independently audited, ABC said -- while declining to specify who did this.

Mr Mau remains unsatisfied. He also questions links to businesses like the Bullets, saying a ``good company'' would get rid of these ties.

Another tie irritating some shareholders is that with ABC's auditors Pitcher Partners, who were paid $1.2 million last financial year.

Pitcher Partners, who last November withdrew as auditors, did not answer queries but has sponsored other sports such as football.

Another backer is Harris Black, chartered accountants. They were ABC's financial and accounting advisers.

They did not respond to interviews but James Black, when a Harris Black partner, said the sponsorship extended for more than 15 years.

Mr Black, who later became ABC's chief financial officer, said the childcare business was never raised in backing the Bullets.

``It's definitely never a conditional sponsorship,'' he said.

Mr Groves, 41, has also said in an unpublished interview there was never pressure.

``That's just people I know and I do business with,'' he said. ``Relationships were well in place before ABC ever listed ... those people have enjoyed the basketball for many, many years.''

Mr Groves reckoned 12 of 70 sponsors had an ABC-Bullets tie in 2006.

``There's plenty of people we do business with at ABC that don't participate and there's plenty of people at the Bullets that don't participate in ABC,'' he said.

One investment which fared poorly for Mr Groves, Mr Zullo and Tony Martin (an ABC director before the stockmarket listing and now a director, with Mr Zullo, of the company owning the maintenance business) was a Sunshine Coast surf-goods shop.

The shop collapsed -- and the trio later alleged a scam in court documents.

Their funding of up to $675,000 had come after an investment pitch that the shop would recruit the marketing punch of Hawaiian surf legend Gerry ``Mr Pipeline'' Lopez.

They alleged shop founder Wayne Panther said Lopez was to enter a licensing agreement.

But the investors claimed this was never going to happen and the matter was little more than fraud.

It is understood Mr Panther denies the fraud claims. The legal action resulted in lawyers for Mr Panther's wife (who was being sued) counter-claiming there had been a sham transaction in a subsequent asset deal to resolve investor problems. Further, her lawyers filed allegations of an attempt to falsify the shop's financial records.

That allegation, denied as untrue, was this came up in talks between Mr Panther and Mr Black (before he became ABC's chief financial officer).

The investors have also rejected the sham allegation.

The lawsuit might still go to court but Mr Groves is apparently pulling out of the action."