James Black Abc Childcare Scandal

The impact of this collapse affected many people and these included the people who purchased shares for the company, the people who worked for the company and the parents who sent their kids to the child care centres. The effect on the parents who sent their kids to these ABC child care centres was that they would have to find their children another child care centre to attend which isn’t easy because a lot of child care centres are heavily booked and it is hard to get places for their children.The people who had purchased shares in the company would have been happy when the share price increase due to big increases in the company’s net profit. They then would have been really shocked when the share price decreased asking the questions how

These people included James Black who was the former CFO and Eddy Groves who was the founder of the business. The Former CFO of ABC Learning James Black has been charged with 3 counts of providing false information on Friday 10th of May 2013. The charges Mr Black has relate to 3 letters between ABC companies and ABC Acquisitions. These outline that Mr Black had purchased 3 overseas companies for ABC in December 2006. Mr James Black l returned to court on the 19th of September 2014 for more sentencing. Eddy Groves role in this scandal is that in 1988 he and his wife had decided to open a child care centres in Brisbane’s suburbs. The centres they had purchased had become successfully quite quickly. Both Eddy and his wife had purchased shares with the help of St George Bank of $20 million during 1993. Their shares were at 14.9 % in St George Bank with the company being worth $2.5 billion. These shares Eddy Groves had bought made him Australia’s richest person at one stage. This soon changed after the shares in St George Bank had fallen dramatically and this forced the pair to sell their shares immediately. The drop in the share price was due to the massive fall of 42% in the company’s net profit. On November 10 2008 Eddy Groves and ABC had to repay the main banks back more than $1 billion dollars. During January 2013 it was confirmed that Eddy Groves was

The Balance Sheet for ABC Learning in 2007 showed that the company had borrowed 1.7 billion dollars with 112.6 million being financing costs. The company’s current liabilities were 1.1billion. From 2001 to 2007 the company’s assets for its child care centres that they owned had increased from 20.2 million in 2001 to 2.8 billion in 2007. The Capital of ABC Learning had gone from 10.3 million in 2001 to a massive 1.6 billion in 2007. The child care centres that ABC Learning bought in 2007 weren’t funded with issued capital but instead they were funded with debt. This affected ABC Learning’s financial performance dramatically. The company’s current ratio in 2006 was 180% which means for every $1 the business pays for current liabilities the company had $1.80 of current assets. However in 2007 the company’s current ratio was 26.9%. This means for every $1 for current liabilities they had 26.9 cents of assets. ABC Learning payed too much for it’s child care licenses and child care centres and it couldn’t repay back the money they borrowed to buy these