ABC Learning shares have been suspended and the founder has fled the country – not to escape anything but to flog 1,000 US child care centres to Rupert Murdoch’s notorious mate Michael Milken, if you can believe The AFR.

And with the Singapore Government lifting its stake from 12% to 14.7%, we have the bizarre scenario of the colourful Gold Coast entrepreneur who has looked after hundreds of thousands of kids around the world, potentially being saved by a foreign government and a convicted felon who symbolised all that was wrong with junk bond debt in the swinging 1980s.

That’s if the alert but not alarmed Rudd Government decides Sing Inc can lift its stake above 15%. After all, if Lee Kuan Yew once described us as the “poor white trash” of Asia, should his family be looking after an MCG’s worth of Aussie toddlers each week?

There hasn’t been a corporate wobble quite like this one – the press attention has been enormous.

The Australian has now splashed on the story three days in a row, although yesterday’s effort about hedge funds and “exploding convertible notes” has been politely debunked by John Durie in his column this morning, following up the company’s rejection of the theory to Dow Jones yesterday.

The ASX is starting to flex its muscles, querying the company quite aggressively with 10 separate questions that were made public with ABC’s responses last night.

The main line of attack was that ABC did not foreshadow the size of its profit fall. The listing rules require a warning at the earliest possible moment if a profit will deviate from the previous period by more than 15%, yet ABC gave no indication the figures released on Monday would be down by almost 50%.

The arrival of Ernst & Young as the new auditor on July 1 last year, replacing boutique outfit Pitcher Partners, caused the accounting change, although Alan Kohler, writing for Business Spectator, was most unimpressed with the result.

The Australian’s Andrew Fraser has today produced the most comprehensive feature thus far on Fast Eddy, which should be read in conjunction with the cracking “Cradle Snatcher” feature that Ben Hills produced for The SMH.

The company might survive in a reduced form, but it’s all over for Eddy because it will book a huge loss on the US exit and he’ll be confirmed as the guy who blew up more than $1 billion of shareholders’ funds playing in the sandpit.

Check out Wednesday’s Lateline interview about Fast Eddy.

Peter Fray

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