29 Jan 2011

ABC childcare chain founder pleads not guilty

6:29 pm on 29 January 2011

Queensland businessman Eddy Groves has pleaded not guilty to a charge of breaching the Corporations Act over the collapse of his ABC Learning Centres empire.

Mr Groves, 44, and fellow former director, Martin Kemp, 53, who faces three charges, appeared in the Brisbane Magistrates Court Friday.

The court heard the case against them relates to the sale of three childcare centres owned by Kemp's company to ABC Learning Centres.

Lawyer Peter Davis told the court his client was pleading not guilty, while Mr Kemp did not enter a plea.

Outside the court, Mr Groves said he would "vigorously defend" the charge.

The ABC reports both men were granted conditional bail and excused from appearing in court when the matter is next listed in late February.

Background

Mr Groves was the driving force behind ABC Learning Centres, a chain of childcare centres, which was worth an estimated $A2.5 billion at its peak.

But more than 240 of the centres were deemed financially unviable in November 2008.

The company was placed into administration with debts of more than $A1.6 billion.

The Australian Securities & Investments Commission started an investigation soon after, into matters such as disclosure, accounting and third-party dealings.