More trouble for ABC Learning as rival childcare group has shares suspended

The child care sector is no longer the playground it once was for investors. Days after the departure of founder Eddy Groves and his wife Le Neve, the company has been hauled before the Australian Industrial Relations Commission.

The child care sector is no longer the playground it once was for investors. Days after the departure of founder Eddy Groves and his wife Le Neve, the company has been hauled before the Australian Industrial Relations Commission.

ABC announced in September that it would seek to slash staffing costs as part of a $26 million cost-cutting program aimed at getting the struggling child care company back on track.

But the union that represents ABC’s child care staff, the Liquor Hospitality and Miscellaneous Union, isn’t impressed and the AIRC will hear the dispute between the union and ABC in Sydney today.

ABC chairman David Ryan has also moved swiftly to distance the company from the Groves era. Just days after acquiring child care recruitment business 123 Careers for $70 million, Ryan has replaced the company’s founder, Donald Jones, as the leader of the business. Jones received substantial amounts for providing services to ABC during Eddy Groves’ time in charge.

And new ABC chief executive Rowan Webb will receive $133,333 a month in his new role. That equates to $1.6 million a year, which is pretty reasonable for what looms as a stressful job.

ABC’s rival CFK Childcare Centres is also in trouble with regulators, with the ASX suspending trade in the company’s shares yesterday after it failed to lodge its 2007-08 accounts.

While CFK has already posed a $25 million loss for the period, its board will not sign off on the final full year accounts until it gets confirmation from National Australia Bank that will extend the company’s lending facility.

The company says it will release its accounts when the confirmation finally comes through.

Related stories:

• Why ABC Learning boss Eddy Groves had to go