THE former chief financial officer of ABC Learning Centres, James Black, was sentenced to 18 months imprisonment, wholly suspended, in the Brisbane District Court.
Black will be released forthwith to enter into a good behaviour bond for two years with $2,000 recognisance.
He had earlier pleaded guilty to one rolled up count of making available false or misleading information about the affairs of ABC that he knew to be false or misleading in material particulars.
The charge related to information being made available to an auditor from Pitcher Partners who was conducting the half year audit review of ABC accounts for the period ending 31 December 2006.
In December 2006, ABC announced the purchase of La Petite Academy in the United States for $US330 million and Busy Bees Group Ltd in the United Kingdom for 71 million pounds.
ASIC alleged that Black gave – or authorised the giving of – two engagement letters between two ABC-related companies (Learning Care Group (UK) and Learning Care Group Inc (USA)) and ABC Acquisitions Pty Ltd which contained information that he knew was false or misleading in material particulars.
The engagement letters were provided to the auditor during the audit, as part of a number of documents used by ABC to justify the payments being made to ABC acquisitions.
ABC Acquisitions received $33 million in respect of the purchase of La Petite Academy and $13.5 million in respect of the Busy Bees Group purchase.
The information was false and misleading in that ABC Acquisitions did not identify La Petite Academy as an acquisition target and was not involved in the approach and negotiation process for its acquisition.
In addition, ABC Acquisitions had not presented Busy Bees as an acquisition target and was not involved in the approach and negotiation process of the Busy Bees transaction.
ASIC Commissioner John Price said the accuracy and reliability of financial reports is key to confident and informed market participation.
“ASIC will act against conduct by company officers which undermines that confidence and places other interests ahead of the shareholder interests they are meant to represent,” Price said.
Australian Property Journal
