The recent collapse in ABC Learning Centres' share price generated a media frenzy. Director Eddy Groves was reputed to have lost $45 million in just two hours of trading. For a time it looked like many centres would close their doors.
ABC Learning is the main player in Australia's corporatised childcare sector.
Groves floated the company on the stock market in 2001. Then he owned 31 childcare centres in South East Queensland. The company now runs 660 centres across Australia and New Zealand.
Since 2003 it has taken over three rival childcare operators, and in November last year spent $218 million buying the third-largest operator in the US, the Learning Care Group. The company also operates 35 owned and 12 managed nurseries in Britain.
ABC Learning is thought to be Australia's most subsidised company and federal government childcare subsidies have provided the foundations on which it was built.
Last year, according to the company, ABC Learning
received $128 million of its $292 million revenue from government subsidies.
It is often alleged that ABC Learning underpays its staff and forces them to clean toilets and buy their own uniforms. When, in 2004, the Queensland branch of the Liquor, Hospitality and Miscellaneous Union, which represents childcare workers' handed parents pamphlets which Groves says portrayed him as "mean and greedy" and implied he was "trying to drive down low wages of childcare workers to line his own pockets", Groves sued the union's Queensland secretary, Ron Monaghan, for defamation.