Childcare groups clash in court over soured deal

THE High Court hearing between two childcare groups over a soured deal involving an alleged breach of contract opened here yesterday.

In one corner were the plaintiffs, local childcare centre chain Cherie Hearts and its founders, Dr Sam Yap and Dr Gurchran Singh.

In the other was the defendant, Australian childcare business G8 Education, which is listed on the Australian Securities Exchange.

Under an agreement signed between G8 and Cherie Hearts Group International last September, G8 was to acquire 64 childcare centres under the Cherie Hearts umbrella for $24.6 million.

The move was so that G8, which has 100 childcare centres in Australia, could expand overseas.

But because some of Cherie Hearts’ childcare centres that G8 wanted to buy were not wholly owned by the Singapore company’s subsidiaries, the Australian company also agreed to advance a loan amounting to more than $10 million to Cherie Hearts. The funds, to enable Cherie Hearts to buy over the minority shares of those childcare centres so it would become a

100 per cent shareholder of these entities, were to be set off against the purchase price, said Cherie Hearts.

But now, Cherie Hearts wants the deal called off and its childcare centres back; it will refund the loan from G8.

It is also seeking unspecified damages for G8’s alleged breaches of contract, including the Australian company’s appointment of receivers.

G8, represented by a team led by Senior Counsel Harry Elias, denies the breaches and wants Cherie Hearts to fulfil the agreement.

The trial continues.

ORIGINAL SOURCE

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