Eddy Groves was one of the key people and Chief Executive Officer (CEO) of ABC Learning an organization on Early Childhood education industry based in Australia. Grooves was an Australian businessman and a founder of the ABC Learning which was once a largest company in Australia and biggest organization as a childcare in the world. Eddy Grooves opened up the centre of childcare during the year 1988, which expanded in short span of time by employing the banking finance, amounted to $20 million by the year 1993. It was considered that Groves was one of the richest people in Australia during the year 2001 at the time of listing of ABC Learning on the Australian Stock Exchange. Eddy Grooves with his work efficiency and business structure made the organization worth $2.5 billion along with the hold of 14.9% shares.
Background of the ABC case
In the earlier years, ABC Learning was one of the largest companies in Australia for providing childcare and education. However, during the year 2008 ABC Learning reflected a rapid fall in price of shares that resulted in selling off the entire shareholdings by Groves and his wife. The organization went into voluntary liquidation during the year 2008- 2009 followed by the criticism on generating the profits at the cost of taxpayers of Australia. It was contended that the organization appointed workers and employees considerably at low wages as well as expansion of business to the areas for achieving monopoly marketability. Considering the financial troubles of the organization, it went into voluntary liquidation and later acquired by “Goodstart Early Learning”.
Wrong acts of Eddy Groves
According to the context of the case of ABC Learning, Eddy Groves faced several challenges and criticisms for the fall in price of the shares and profitability. It was observed that Groves was accused of helping the director of the organization for a dishonest use of organizational level. It was also noticed that Eddy Groves founded guilty of providing lower payment to the employees in order to cut the cost, which was not in line with the business quality. During the later years, organization experienced certain charges with the legal issues for conducting misuse of director’s duties to perform business activities in compliance with relevant legislations.
Lack of professionalism
In view of the wrongful acts of Eddy Groves in consideration with the fall in price of organizational shares and profitability, it can be said that there was lack of professionalism on part of the director and Groves. It has been observed that the business activities in ABC Learning have not been performed in compliance with the regulatory frameworks and legislations as provided under the Australian business law and accounting standards (Kelly, Brien and Stuart 2015). Groves found to be guilty of inappropriate use of the higher position as well as misstated strategies to conduct lower business costs. It is essential to maintain the business ethics and professional due diligence by the organizational officials to conduct the business activities with transparency and accountability. Since Groves failed to follow such professional ethics and integrity in conducting business it can be said that there was lack of professionalism on his part (Grant 2016).
Conclusion of ASIC’s enquiry into ABC Learning
Australian Securities and Investment Company concluded the enquiry into ABC Learning organization during the later months of 2012. It was due to declaration of bankruptcy by Eddy Groves during the month of January 2013 as well as the director of the organization Kemp did not find guilty during the investigation. Further, the managers of ABC Learning were not found guilty or compliance of any acts that would result in legal action hence, ASIC concluded its enquiry on ABC Learning (Kelly, Brien and Stuart 2015). After the start of investigation on ABC Learning for its voluntary liquidation, ASIC concluded in the year 2012 since another children education centre had already acquired it.
Justification of the title “Fast Eddie”
“Fast Eddie” was a nickname given to Eddy Groves due to the luxurious lifestyle he used to lead in Australia. Additionally, Groves also loved exotic sports cars, which were quite expensive along with the huge amount of investment in other companies that got him the title “Fast Eddie”. If the lifestyle of Eddy Groves is considered then the title can be said to be justified while the professional acts performed by him in ABC Learning would not justify such title. As Groves was conducted with the professional misconduct and misused his higher position in the organization, title “Fast Eddie” cannot be said to be justified.
Grant, D., 2016. Business analysis techniques in business reengineering. Business Process Management Journal, 22(1), pp.75-88.
Kelly, R., Brien, E.O. and Stuart, R., 2015. A long-run survival analysis of corporate liquidations in Ireland. Small Business Economics, 44(3), pp.671-683.