Mon. May 23rd, 2022

A crisis engulfing French nursing home operator Orpea has deepened after the government summoned the chief executive to respond to allegations made in a new book that it had systematically abused elderly residents.

The company’s shares fell a further 10 percent on Thursday and have lost half their value since Monday when journalist Victor Castanet revealed the findings of a three-year investigation in a book titled. “Graves”. He also alleged that he was offered bribes to stop his work.

“I have been pressured and threatened, as have some of my resources.” he told French channel BFM TV. “Halfway through the investigation, via an intermediary, a proposal was made to see if I would stop my work for € 15 million.”

An Orpea spokesman said the company had “formally denied” that any payment had been made to stop the publication of the book.

The book claims the company took a turn to save money at the approximately 370 nursing homes it operates in France, causing elderly residents to be treated poorly. One employee at a care home in a wealthy suburb of Paris where residents pay starting rates of € 6,500 a month, said she was told to ration adult diapers and allow people only three a day.

Orpea on Monday called the allegations made by the book “outrageous and prejudicial”. But on Wednesday, his board of directors said it would instruct two consulting firms to conduct an independent investigation into the book’s allegations and promised to share the findings with regulators.

“We continue to confirm that the group’s management has at no time put in place any system to orchestrate the practices for which it is criticized,” Orpea said.

Orpea has expanded rapidly to more than 20 countries in recent years, earning € 3.9 billion in revenue and € 467m in operating profit by 2020. France and the Benelux region are its largest markets, accounting for 60 percent of sales from 372 homes generate.

It is now facing a potential political scandal, with politicians calling for a parliamentary inquiry and promising the government to impose “sanctions of the utmost seriousness” if the allegations are true.

Shares in rival French nursing home operators also sold this week as investors worried about the consequences: Korian lost nearly 30 percent of its market value and LNA Sante 18 percent.

Castanet said he was surprised by the effect of his book. “I thought it would be a national scandal, but I did not think there would be such a shock wave or that so many families would come in contact with me,” he said. He also predicted a series of legal charges against Orpea in the coming days of the families of residents and employees.

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