Class action against Ashley Services

Note article in The Australian today.


http://www.theaustralian.com.au/hig...s/news-story/36db4f96595f2a9e0e199ebb47cd9090
Private training model hits skids

All four large private training chains that listed over the past three years have collapsed or are in serious trouble, in a dramatic reversal of fortune for a business model that looked set to usurp the sector.
Law firm William Roberts has confirmed it will pursue a class action against Sydney-based training and recruitment firm Ashley Services, which listed on the ASX 15 months ago.
The claim alleges Ashley did not disclose the full impact of the withdrawal of an apprenticeship subsidy in its prospectus.
The scheme’s axing was later blamed for a fall in enrolments that triggered a $10 million downgrade in the company’s earnings, slashing the price of its shares — which listed at $1.66 — to 56c in April.
Two weeks ago, trading in Ashley shares was suspended — with the stock worth just 13c — after the Victorian government stopped contract payments over unspecified audit findings.
While Victoria is still considering whether to reinstate the payments, its hand could be forced by NSW’s decision last week to terminate contracts with two Ashley subsidiaries over another unspecified default.
The two providers have indicated they will fight the cancellation, due to occur today.
If it proceeds, Ashley will be ineligible for Victorian funding next year. Withdrawals of state funding precipitated the downfall of former sharemarket darling Vocation, which collapsed in November last year after at one stage being valued at $650m.
Another large listed chain, Australian Careers Network, collapsed in March following regulatory action involving federal and state funding schemes. Its shares had been suspended, just 10 months after it listed on the ASX in December 2014.
New Zealand-based Intueri Education Group last week announced its intention to delist from the ASX, while interim chief executive Rod Marvin confirmed retrenchments were under way at local subsidiary Online Courses Australia.
In September, the Australian Skills Quality Authority flagged a possible cancellation of the registration of OCA and Intueri’s other Australian training provider, Conwal Institute. Intueri’s NZ shares have also plummeted in the face of regulatory probes.
All four chains were scrutinised early last year in a study by the University of Sydney’s Workplace Research Centre.
It found they were overly reliant on government funding and converted an average of 35 per cent of that money directly into profit.
The study found more than half Ashley’s enrolments were in Victoria. While that proportion is likely to have declined since the establishment of the Smart and Skilled scheme in NSW, Ashley’s funding from both states is now under threat.
Company secretary Ron Hollands declined to comment on details of the NSW audit findings. He flagged a further statement on December 8, when the suspension of trading in the company’s shares is due to end.