DOUBTS are growing about the survival of ABC Learning Centres after the embattled child-care provider said it might still be weeks from releasing its much-delayed full-year results and announced one of the new-broom directors appointed last month had left the company.
In a statement to the market yesterday ABC said it expected to release its audited accounts by the end of this month, which "will eliminate any further speculation and uncertainty", about its future.
But Frank Ford, one of five directors appointed last month, "has advised that he no longer wishes to proceed with the appointment", the company said.
The other four directors - three of whom represent major shareholders - are expected to join the board after the full-year results have been released. They were originally due to join next week.
An ABC spokesman denied the delay had anything to do with the incoming board members avoiding any further fallout from the company's contentious financial statements.
He said it had "always been the agreement" that the new board members would join after the release of full-year results.
Disclosure has been an issue for ABC for years but the problems came home to roost with the release of its half-year results in February, when its new auditor, Ernst & Young, forced it to disclose reliance on payments from developers of its child-care centres.
ABC shares have not traded since August 21, when it warned of another profit downgrade and indicated it was at loggerheads with Ernst & Young about the treatment of statements prepared under the previous auditor.
This is expected to result in further revisions to prior-year earnings and asset write-downs, which ABC has been resisting.
The company consulted another firm, KPMG, about the revisions, which will provide further ammunition for a shareholder class action being prepared by the litigation funder IMF (Australia).
A spokeswoman for KPMG said the firm was "engaged to give accounting advice to ABC Learning". She gave no further detail.
The Australian Securities and Investments Commission is investigating ABC for potential breaches of the Corporations Act.
IMF's managing director, John Walker, said the company was waiting for ABC's full-year results before commencing any legal action. But he said there was growing concern about the solvency of ABC. Insolvency would make a class action pointless.
The banking syndicate that provided a $1.48 billion debt facility to ABC last year took out a $1.25 billion fixed and floating charge against the company's assets last month. That has reinforced fears that ABC may not earn enough to service its debt.
Yesterday ABC appointed a new chief financial officer, Peter Trimble, to start on September 22.
