ABC centres still on the block

As Australian regulators close in on former ABC Learning chief executive Eddy Groves, efforts to sell the group's New Zealand subsidiary continue.

The 127 New Zealand childcare centres and College of Early Childhood Education evaded the receivers when the ABC Learning empire collapsed late last year with debts of A$1.6 billion ($2 billion).

A sale has been expected since March but contenders have come and gone. Last month ABC confirmed a new bidder had entered the frame, reported to be Singapore-based childcare firm Knowledge Universe.

At the same time Christchurch property developer Hamish Ireland said he was the preferred bidder for the New Zealand subsidiary.

The Ireland Group used to operate the Mother Hubbard chain of childcare centres which it sold to ABC about six years ago. It subsequently developed new centres for ABC.

Chris Cowan of ABC receivers McGrath Nicol in Australia confirmed the sale process was continuing.

Meanwhile, the Australian Securities and Investment Commission has succeeded in freezing assets worth millions of dollars held by a mysterious discretionary trust that it believes is the "alter ego" of Eddy Groves.

Groves stepped down as chief executive of ABC Learning just before the company collapsed.

The Sydney Morning Herald said the ASIC moved to freeze Groves' and his wife's assets in June after it became aware he had transferred his luxurious retreat in Currumbin Valley, Queensland, to his former brother-in-law.

Lawyers for the ASIC and Groves reached an agreement on the freezing of the assets, with the corporate regulator saying it was comforted that Groves' wife had stood down as the sole director of the trust.

ASIC's lawyers told the Federal Court in Sydney this week that the commission had good reason to fear Groves was selling his assets rapidly, because he had given the trust A$12.6 million in recent months. Groves denies that he is behind the trust.

And on this side of the Tasman a High Court judgment has revealed unusual goings-on surrounding the ABC group.

Two New Zealand-registered companies owned by Queensland-based childcare centre developer Doug Lomas have been put into liquidation by the Inland Revenue over $4 million in unpaid GST.

Berrytime and Berrytime Land sourced childcare centres for ABC in New Zealand.

A pastoral and bloodstock company owned by Lomas called Canungra Pastoral received funds from ABC which were to be drawn down each time the Berrytime companies found suitable childcare centre sites in New Zealand, Justice Pamela Andrews said in the judgment.

ABC had given $40 million to Canungra Pastoral, but the company argued it was a loan and denied it was an agent for the Berrytime companies.

The Berrytime group has unsuccessfully challenged the $4 million IRD says is owed.