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The childcare company owned by the wife of disgraced ABC Learning founder Eddy Groves and the convicted former chief financial officer of the collapsed chain are working with a coal mining magnate to rapidly expand their multimillion-dollar childcare chain.
Imagine Education Group is in the process of taking over Eden Academy, a merger that could result in a new 100-plus centre childcare chain, according to documents filed by the corporate regulator and four industry sources.
The sources have been granted anonymity to discuss confidential matters.
Imagine Group is owned by Groves’ wife, Viryan Collins-Rubie, a childcare executive in her own right. Collins-Rubie said her husband has never owned a share or been an executive in Imagine.
“But I will also say that my husband built some of the most amazing childcare centres in the world, and I value his experience and his advice,” she said.
However, Rampart reported on Friday that Groves does own shares in the US arm of the company.
One well-placed source also said Groves – who was declared bankrupt in 2013 – attended meetings held on the Gold Coast to discuss the future company with senior executives. A separate source close to the couple denied that Groves had anything to do with the meetings, and was present at one simply because the meeting was held in the couple’s home.
“Eddy Groves is a great friend, mentor and my very first boss!”
Eden Academy co-founder Sean Collins
His appearance – coupled by Groves being announced as a panelist for a “masterclass series” pitched at childcare operators – fuelled speculation that the former rich-lister could be involved in the future childcare chain.
There is no suggestion Groves has anything to do with Imagine’s Australian operations.
Eden operates 60 childcare centres and Imagine 53 centres nationwide.
Also involved in the merger are Chris Wallin, a geologist-turned-coal billionaire, and James Black, ABC Learning’s former chief financial officer (CFO), who pleaded guilty in 2015 to three counts of authorising false or misleading information.
Eden co-owners Chris Sacre and Sean Collins – also an ex-ABC executive – are ready to sell imminently, sources confirmed. The pair denied the sale when approached by this masthead on Thursday, or any knowledge of Groves’ involvement.
“We have every intention to continue to grow Eden,” Collins said.
He added: “Eddy Groves is a great friend, mentor and my very first boss! I’ve admired his courage and influence across the sector over the last 20 years having faced so many challenges and always kept children’s development as his core focus.
“I can’t comment on [Groves’] ownership/involvement with Imagine as I simply don’t know what that is.”
Groves said: “I have been involved in business and property development interests in both Australia and in North America. But the success of Imagine Education is Viryan’s success story and not mine.”
“To be clear, my wife Viryan Collins-Rubie was in childcare sector well before we met. Like many couples, we met through our work in the same sector.
“Imagine Education is Viryan’s business, and she operated it away from ABC. Any speculation that I am a shareholder in Imagine or am an executive is not only wrong, but it takes away from my wife’s career and her own individual success.”
The involvement of those close to the spectacular multibillion-dollar collapse of ABC Learning Centres – which devastated hundreds of parents, investors and creditors – has angered some Imagine and Eden staff members aware of the impending deal.
The collapse of the company that once had an overwhelming dominance over Australia’s childcare industry in 2008 led to years-long ASIC investigations, public examinations and civil lawsuits.
Deakin University professor Andrew Scott, who has written a book on the ongoing childcare crisis, said the potential re-emergence of figures connected to the world’s biggest childcare collapse on the ASX raised red flags about the ability of the sector to provide safe and quality education for children.
Scott referred to various inquiries launched last year in the wake of accused paedophile Joshua Brown’s arrest that repeatedly heard that for-profit models often meant child safety was compromised by shareholder value.
Black was sentenced to an 18-month suspended jail term and issued a $2000 fine after he admitted to lying to ABC’s auditors while he was CFO. When grilled during public examinations, Black conceded despite holding the top financial job, he had no access to the company’s books.
Wallin and Black are already shareholders and directors in Imagine Education entities, while Wallin recently became the sole owner of the group’s head trust. The duo did not respond to questions.
Many of those involved in the impending merger have longstanding relationships that date back decades. Collins worked in acquisitions at ABC before joining his Eden co-founder Sacre, who was G8 Education’s CFO between 2008 and 2016.
Wallin and Black also have longstanding associations; the mining rich-lister hired the accountant to work for QCoal soon after the spectacular collapse of ABC.
Eden Education Group posted a revenue of $122 million last financial year but lost $3.8 million. That same year, Imagine Education pulled $174 million and a profit of $10.5 million.
Eden’s auditors noted in its financial report that urgent funding was needed to ensure the “ongoing viability” after citing the year’s loss, while its net current liabilities totalled $37.9 million.
“Management acknowledges that their ongoing viability relies heavily on successfully securing additional bank funding, extending existing facilities, and deferring repayments to related parties.
“If these fail, the Group may not be able to realise its assets or discharge its liabilities.”
Australia’s largest public childcare operator, G8 Education, announced in April it would close up to 40 of its centres amid the ongoing fallout from the childcare crisis that exposed glaring safety issues.
An investigation by this masthead revealed G8 was Victoria’s most sanctioned childcare provider, with almost one-tenth of its centres penalised since 2016. Another childcare chain, Affinity Education, was exposed for continuing to push aggressive expansion despite a longstanding problem of children being left unattended.
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Carla Jaeger is a journalist for The Age. Got a tip? Email carla.jaeger@theage.com.au or message carlajaeger.62 on Signal.Connect via X or email.From our partners
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