Certainly, quality can not afford to decline. Lateline’s groundbreaking “aged care crisis” investigation by Margot O’Neill last year exposed woefully inadequate standards of care across the industry. Japara is no exception. Operating arm Aged Care Services Australia Group was criticised by Victoria’s coroner after an 89-year-old dementia sufferer at its Central Park nursing home in Melbourne died in 2007, four days after she was assaulted by another patient, who also had dementia and was prone to violence.
In 2008 the federal government ordered checks of all 32 nursing homes operated by ACSAG after finding malnourished residents — two weighed less than 25 kilograms — and dangerous understaffing at its Kiralee nursing home in Ballarat. Then-federal ageing minister Justine Elliott said practices at Kiralee were “just unacceptable”.
Japara appears to have cleaned up its act since then, although it made the news again after a carer accidentally gave 10 times the required dose of morphine to a patient, who subsequently died, at the Tamar Park nursing home near Launceston in 2010, which was later closed.
Japara was also subject to serious allegations in the Victorian Supreme Court in 2010 by former chief executive Arnan Rouse, including that Japara’s property trust held on to $8 million in residents’ accommodation bonds. The case was only settled in 2012 when the rest of Japara’s shareholders bought out Rouse’s 20% stake in the company for $21.5 million, with money borrowed from the company and declared a dividend in last week’s float.
Before the float, Japara’s two major shareholders were Sudholz and Julius Colman, who each held 31.4% of Japara Holdings, which was sold into the float at $233 million. They have retained stakes of 6% and 4%, worth $39 million and $34 million at yesterday’s price of $2.57 and have shared in tens of millions of dollars in cash. Sudholz also got a tasty float bonus of $1.5 million, paid.
Sudholz has a long background in the property industry, including as a partner of collapsed auditors Arthur Andersen, merged locally with Ernst & Young, where in 2004 he helped promote an unregistered managed investment scheme, Business Australia Capital Finance, run by lender Ian Lazar, subject of Four Corners investigations that year and — astoundingly — again this month. In 2004 Sudholz was also embroiled in litigation over a joint venture to develop a 98-unit retirement village in Melbourne’s Kew with Primelife, founded by entrepreneur and former bankrupt Ted Sent.
Colman, now described as a professional poker player and philanthropist, is a lawyer who pioneered the unlisted property syndicate in Australia, founding the MCS business, which paid high commissions to financial planners who flogged hundreds of millions of dollars’ worth of property to investors. Colman sold MCS to shopping centre owner Centro in 2003 for a stunning $194 million, and thousands of syndicate investors subsequently got caught up in the collapse of Centro when the GFC struck in late 2007.
Years later, the former MCS property syndicates are still being wound up — often at heavy losses.
This article originally appeared on Crikey.
