The rise and fall of ABC Learning Centres supremo Eddy Groves has been quite a tale. The collapse of Australia’s largest childcare business and subsequent government bail-out is shaping up to be a national disgrace.
The Sydney Morning Herald’s Ian Verrender astutely notes many were suckered by Eddy’s success story: “the scandal of the rise of and fall of Eddy Groves is how anyone was seduced into his fantasy tale in the first place. Australia’s biggest banks believed him. They are owed $1.1 billion between them. Even more amazing, the Singapore Government’s investment arm Temasek tipped in a lazy $400 million. Despite sophisticated investment models and analytical tools employed by our big banks and investment houses, it shows a sucker is born every minute.”
But don’t be too harsh on the banks and the Singapore Government. Perhaps they believed the fantasy tale reported in the business pages of the nation’s newspapers when Eddy was on his way up. Several high profile finance reporters were only too happy to praise Eddy when being rich was as easy as ABC and he was number one on the BRW Young Rich List .
Poor Eddy. Now the likes of the Herald Sun are publishing damning articles about his lavish lifestyle, when as recently as February last year they hailed him as one of The Greatest Entrepreneurs. And they weren’t the only ones to hail Eddy’s business acumen.
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- Malcolm Maiden was excited in 2006 at the prospect of ABC expanding into the US since Australia just wasn’t big enough. What could possibly go wrong? Eddy knew the US childcare market after all, having spent six months there in the late 1980s (!).
- Peter Switzer defended Eddy in The Australian in March this year, claiming “the excessive disdain expressed towards the likes of ABC Learning Centres’ Eddy Groves borders on the unjust.”
- The Herald Sun’s Terry McCrann hailed ‘Lazarus Kid’ Eddy that same month for being proactive in well and truly stabilising ABC’s debt position. McCrann basically reckoned the market was being harsh on the likes of ABC and its ilk with their problems “hardly a saga of financial irresponsibility or real bankruptcy.”
- The Age’s James Kirby had reservations before meeting “human dynamo” Eddy, thinking he’d personify all the flaws of the semi-privatised childcare system. Unfortunately, Kirby was also ultimately seduced by Eddy’s brilliance and charisma “that had you clutching the chair.”
At least Kirby noticed signs of hubris and last Sunday ruefully admitted a “legion of analysts and journalists (myself included)” fell for the Eddy Groves story.
Will other journalists be fully frank enough to concede Eddy fooled them too? Since Switzer, McCrann and Eddy all seem to move in the same business circles offering their services as corporate public speakers they could at least remind Eddy to update his Ovations! bio to reflect recent disastrous events next time they see him.
And as the sorry saga of ABC Learning’s collapse plays out over the next few months with the media naming all those who allowed it to happen, don’t forget the contribution some in their own ranks made to the debacle.
Are you a parent with a child in an ABC Learning Centre or an ABC Learning employee with a tale to tell?