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For his 40th birthday a couple of years back, Eddy Groves took 24 or so of his closest friends on a round-the-world jaunt in a jet chartered for the event. His Cessna Citation jet, which seated just 16, was not big enough.
Details of the itinerary are sketchy. There were suggestions they assembled in Las Vegas for a spot of gambling.
Variously described as reclusive and shy during his rapid rise, his largesse, and where exactly all that money came from, is a touchy subject for Groves these days.
He says the Citation, his helicopter, the Ferrari, the 26-metre yacht moored at the Versace marina and the various waterfront and Gold Coast hinterland properties are all gone.
That could well be true. Strangely, however, a few weeks ago – just after Groves trousered an $800,000 payout when he jumped from the soon-to-collapse child-care group ABC Learning Centres – he was spotted on the Gold Coast highway in a new silver Mercedes with the number plate BULLETS.
That probably was not his either. More than likely it is owned by the collapsed Brisbane basketball team Groves owned.
Taxpayers have tipped in $22 million as a lifeline to keep the child-care centres open until Christmas while the collapsed group’s receivers began begging the banking syndicate this week to extend extra cash to prevent the entire network shutting down.
Put aside the accounting irregularities now emerging from the collapsed company. Ignore the allegations of conflicts of interest that allegedly enriched various family members on construction and maintenance contracts.
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.
Despite all the high-powered negotiations and due diligence, they missed the bleeding obvious – that small family-run suburban child-care centres will always be more efficient than small corporate-run ones.
It is the same ethos that has ruled the economics of rural production in this country. Corporate farming has never overtaken family-run operations because a family will run their business on a much tighter budget and will endure leaner returns than any corporation just to ensure their survival.