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OTTAWA, Ontario – A new report, ‘CPPIB’s Orpea Debacle‘, from CICTAR (Centre for International Corporate Tax Accountability & Research), explains how the Canada Pension Plan Investment Board (CPPIB) failed to manage its large investment in Europe’s largest long-term care company, ORPEA.
The collapse, along with the French government’s bailout of the ORPEA group’s business empire, brought grief to residents of care homes across Europe, their families and the staff who tried to care for them. While the ORPEA scandal created major headlines across France the controversy received little media and political attention in Canada, despite Canada’s largest and main government-controlled pension fund losing more than half a billion dollars in workers’ retirement savings.
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Despite displaying responsible investment policies, with a focus on transparency and accountability, CPPIB has not admitted its failure in this high-profile international investment. The report raises broader concerns about the massive investment in the for-profit long-term care sector and other privately run public services in Canada and around the world by the CPPIB and other large Canadian public pension plans, many of which follow the private equity industry’s pattern of shorting. -long-term profits, while oppressing consumers, exploiting workers and avoiding taxes.
Jason Ward, CICTOR Senior Analyst said: The CPPIB and other large Canadian investors are not complying with their stated investment policies that they are responsible and desperately need to increase transparency and accountability in their global capital investments. Yes, these pension funds need to generate returns to fund the retirement of Canadian workers, but not while harming the public through simplistic and destructive short-term investment practices.
A previous CICTAR report issued in 2002 and developed in collaboration with the French unions, the Fédération CFDT Santé-Sociaux and the Fédération CGT Santé Action Sociale showed how the ORPEA group used domestic revenues, largely funded by public funds, to finance the acquisitions raised debts. of a large European property portfolio, managed through a network of corporate entities from Luxembourg to the British Virgin Islands and largely hidden from the company’s shareholders and the public.
Despite all the resources and expertise of the CPPIB, they failed to see the coming disaster.
A new report from CICTAR explains that, despite holding two seats on the board of the ORPEA group, the CPPIB has done nothing to stop a pattern of blatant mismanagement. Nor did public intervention prevent the loss of more than half a billion dollars as the company collapsed and was bailed out by an intervention led by the French government.
According to Jason Ward: We are concerned that this may not be an isolated case. The Orpea scandal, involving the mistreatment of elderly citizens and childcare workers, raises broader questions about the nature of the public pension fund’s investment in the private childcare industry, which relies heavily on government funding and has a long history of failing to meet the basic human rights of the most vulnerable people in society.
Some Canadian government pension funds also have large investments in the scandal-plagued long-term care sector, and we are concerned about the level of scrutiny being placed on both the standards of care and working conditions in those facilities. Anyone whose retirement funds are invested in private public utilities may be at risk of a similar collapse.
View the source version on businesswire.com: https://www.businesswire.com/news/home/20241018362167/en/
Contacts
Jason Ward, CICTAR Senior Analyst, +61 488 190 457 or jason.ward@cictar.org
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