Despite his spectacular loss of wealth in ABC Learning, little detail has been reported about Eddy Groves’ remaining business interests.
While Groves’ beloved Brisbane Bullets basketball team licence was handed back to the NBL last June, Groves is still believed to retain an interest in Quantum Food Services, the largest distributor of Paul’s milk in Queensland. Groves remains the sole director of Quantum, following the resignation of Bill Bessemer in September 2008 and Le Neve Groves in April 2008.
In October 2007, Quantum converted from a public company to a private company, therefore its last publicly disclosed financial statements date back to 25 September 2007 and relate to the 2006 fiscal year. Those financial statements reveal that the business had net assets of $1.6 million, after recording a profit of $413,798, for the year ending 30 June 2006 (the business did manage to generate operating cash-flows of more than $1.3 million).
Much like ABC Learning Centres, Quantum had accumulated losses over its lifetime and its assets largely consisted of intangibles. Coincidentally, Quantum was audited by Pitcher Partners (with Simon Green signing the 2006 accounts). Green was also the auditor of ABC Learning Centres who signed off on the controversial accounting treatment of up-front developer payment which served to allegedly inflate ABC’s earnings.
Quantum’s 2006 Financial Report also contains a somewhat confusing statement that “the Directors have entered into a heads of agreement with other parties to purchase the group’s supermarket, milk and food distribution operations. This transaction has been concluded.” There is no further detail regarding the sale, but earlier in the Financial Report, the company noted that “the distribution operations of the group were expanded during the year through the acquisition of further franchise operations.”
In addition to the milk distribution business, Groves also has links to the internet betting agency, Sports Acumen. Sports Acumen’s website claims that the company “offers a comprehensive range of Fixed Odds and Spread Betting markets on the most popular events from around the world, from Aussie Rules to Rugby Union and Premier League Soccer to Spring Carnival Feature Racing.” The site notes that “Sports Acumen is licensed in Canberra, ACT, and is a wholly owned subsidiary of Bet Worldwide Pty Ltd.”
Sports Acumen has two directors, one of whom is James Charles Black. Black and Groves have a long history. Black was previously Groves’ personal accountant (when he was a principal of the firm Harris Black). Harris Black also served as the registered office of a company called Bright Horizons. Bright Horizons, which is owned by Eddy Groves’ brother-in-law, lent millions of dollars to a company called Childcare Providers. The former CEO of Childcare Providers happened to be Eddy Groves’ new bride, Viryan Collins-Rubie.
Black was also previously a director of Quantum until 2001. Never one to be concerned about conflicts of interest, in 2005 Groves appointed Black as the new CFO of ABC Learning Centres. Black’s tenure as CFO was brief, with Groves’ long-term friend resigning in April 2008. Last August, Black (and Groves) were interviewed by ASIC regarding possible breaches by ABC of its continuous disclosure obligations. ASIC has not yet revealed whether any charges will be laid.
Sports Acumen itself is owned by holding company, Bet Worldwide Pty Ltd. Bet Worldwide’s registered office is, unsurprisingly, Harris Black Chartered Accountants and, until 21 April 2008, Eddy Groves was a director of the company (no reason was provided for Groves’ sudden resignation). Bet Worldwide is jointly owned by Coda & Co Pty Limited and Garfield Enterprises Pty Limited. The owner of Garfield Enterprises is Paula Chant of Albert Park. Groves is believed to have owned a 25% stake in Sports Acumen (via Bet Worldwide).
Crikey attempted to contact Sports Acumen director, Stephen Chant, to determine whether Groves still retains a financial interest in the online gambling company but was unable to reach Chant at his listed address.
In addition to his alleged milk and gambling interests, Groves also owns 5 million shares in ABC’s former house broker, Austock (the value of those shares have slipped from $11 million to just under $1 million). While Groves was CEO of ABC, the company paid Austock around $40 million in fees.
In the tradition of corporate failures before him, while ABC shareholders have been wiped out, and its low-paid employees and customers face uncertain futures, Groves has been able to retain wealth in other areas, which he will no doubt hope to keep out of the hands of ABC creditors.