ABC Learning shares went into a trading halt this morning as the directors started to come clean on the scale of their margin calls.
Non-executive director John Ryan didn’t use the 48 hours he had to reveal that his entire 249,101 shares were swept away yesterday at the knock-down price of $1.895 – fetching a rather miserable $472,000 for his lenders on a parcel that was once worth more than $2 million.
We’ve seen a spate of executive margin calls of late, but Ryan is the first respected member of the non-executive directors club to cop one. What would his fellow directors at Lend Lease and Transurban, plus those he advises at Virgin Blue and Caliburn, make of such an ignominious event?
The bigger story today involved executive director Martin Kemp, the bloke directly responsible for the company’s 1100 Australasian centres and the construction of another 70 new facilities in 2008-09. Kemp had previously suffered margin calls in December and January which together raised $7.7 million from the sale of 1.6 million shares at an average price $4.81.
Today he has revealed that 2 million shares were sold at $3.75 a pop last Friday – two business days before that dreadful half year profit result was released.
No wonder ABC Learning was yesterday stressing that “the directors do not intend to voluntarily sell their shares in the Company and will only sell if required to do so by their margin lenders.”
Kemp would have been charged with insider trading had he voluntarily dumped the stock, but he copped it in the neck yesterday when his lenders dumped a further 5.642 million shares at just $1.67 a pop. But there’s no specific carve-out for margin loans in Australia’s insider trading laws?
All up, these four margin calls have yielded $24.7 million and left Kemp much-diminished with just 2.758 million residual shares worth $5.9 million based on yesterday’s close.
The question now is what has happened to the 20 million shares that Eddie Groves owns and the 17 million held by his wife, Le Neve Groves.
Commsec is showing one block trade this morning of 10 million shares at $2.10 before the suspension notice was lodged at 10.28am. Was that the Groves?
There has been some tension in the family of late, especially the decision to stop disclosing the huge construction contracts awarded to Eddie’s brother-in-law, Frank Zullo.
Go here for interviews on ABC Sydney and ABC Melbourne about ABC Learning.
Nothing like karma. Groves has lived a luxury lifestyle from penny-pinching the kids and exploiting his staff. I hope he loses everything. Childcare should never be a for-profit business.
Does this mean that the Brisbane Bullets will have to use Virgin Blue instead of the private Jet?
Don’t blame Eddy. He was only doing what he was rightfully allowed to do.
Blame a society that allows economy to ride roughshod over what is fundamental to what makes a society strong i.e. the care of our vulnerable (child & aged care)