Australian Pharmaceutical Industries

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Australian Pharmaceutical Industries (ASX:API) is a company comprising notably of franchises in Australian health and beauty retail chains. It was founded in 1910. In 1997, it listed on the ASX. Its annual revenue for the year ending 30 April 2007 was $2,649 million, up 2.6% on the previous year[1].

Contents

[edit] Companies

[edit] Controversies

[edit] Accounting Discrepancies

In 2006 after the implementation of a new IT system, the company found $17.2 million of the company's declared profit had disappeared. Forensic Accountants called in could not find any trace of the money. API chose to write the full amount off their annual profit, causing a net loss of $17.2 million. The company's CEO Jeff Sher resigned, and the company said he would not be hired back in the future as a "consultant"[2].

[edit] WorkChoices

After the loss of $17.2 million in the 2006 financial year, the Priceline division shed 32 workers for "operational reasons" under the new WorkChoices Legislation. One of these workers, Andrew Cruickshank, a store layout planner, alleged Priceline fired him on his $101 000 a year contract, replacing him with someone on a $75 000 contract. Priceline claimed otherwise, "It was not the same role...the person wouldn't have been capable of doing the same things"[3]. The AIRC found in Priceline's favour, "The question of a 'valid reason' need not be considered when an argument is advanced regarding the termination being for operational reasons"[4]. Priceline retrenched 32 other staff at the same time, as a result of an operating loss of $17.2m. Prime Minister John Howard condemned Priceline and other firms seeking to fire workers and rehire at lower wages, "operational reasons are not and should never be seen as code for saying, 'Well I'll get rid of "X" because I'm paying him $100,000 a year so I can employ "Y" at $80,000 a year.'"[5]

[edit] Sigma Takeover

Rival company Sigma Pharmaceuticals had attempted to take over API in 2002, but had been blocked by the ACCC[6]. Sigma made another bid in 2006, and discussions continued until December 11, 2006, when Sigma withdrew their bid.[7]

[edit] References

  1. ^ http://www.api.net.au/investor_relations/documents/FINAL%2028%20June%20FY07%20media%20release.pdf
  2. ^ Beats me! AusPharm loses $17m somewhere - Business - Business - smh.com.au
  3. ^ Priceline case puts focus on IR laws - National - theage.com.au
  4. ^ Sacked dad: you could be next | Herald Sun
  5. ^ PM - Howard steps into Priceline row
  6. ^ ACCC denies authorisation for API - Sigma merger
  7. ^ Qantas, banks lift market

[edit] Links

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