Bolton Clarke calls for more public money, after $700m acquisition deal and failed China expansion

Australia’s second largest aged care provider has been called on to provide greater transparency over its finances, after its expansion into China failed and it sealed a new $700m deal.

Exclusive: Australia’s second largest aged care provider is calling for more federal funding in the budget next week, as it can be revealed that its ambitious plans to expand into China have spectacularly collapsed.

Bolton Clarke, a not-for-profit, has been called upon to provide greater transparency over its finances, including a for-profit deal with a Chinese real estate firm by one of its subsidiaries.

It comes as Bolton Clarke also acquired two other Australian care providers in the last few months – including Allity in a $700m deal – boosting its portfolio to 70 residential aged care homes, 36 retirement villages, with 130,600 community care clients and 10,000 staff across most states in the country.

It received $356.7m or 68 per cent of its total income in the form of federal government subsidies for its Australian business in the last financial year.

Its push into China was helped by the Queensland government, with former deputy premier Jackie Trad joining representatives from Bolton Clarke on a visit there in September 2019.

United Worker’s Union Carolyn Smith said profits bolstered from government subsidies for provision of aged care services in Australia were being invested in “foreign profit seeking ventures”, instead of back into aged care homes.

Bolton Clarke partnered with the Yango Holding Group to assist in China’s emerging aged-care industry. Bolton Clarke’s chairman Pat McIntosh standing near Jackie Trad.

A Bolton Clarke spokeswoman said this was not the case for them with “no funding from our NFP (not-for-profit) organisation is distributed offshore.”

She said Bolton Clarke never had or would use “federal funds received for the purposes of delivering care to support any other aspect of our operations”.

In one shocking audit of Bolton Clarke’s Rowes Bay centre in Queensland, assessors from the Aged Care Quality and Safety Commission discovered one resident with “soiled and bloodstained bandages and dates recorded on the bandage to indicate it had not been changed for a nine-day period”.

Bolton Clarke subsidiary RDNS Hong Kong was to commission and manage 3,490 residential aged care beds in Shanghai by 2022.

In 2019, Bolton Clarke stated that by 2022, its for-profit subsidiary, RDNS Hong Kong, would commission and manage 3,490 residential aged care beds in Shanghai.

Anastasia Palaszczuk’s government report on the trip to China with Ms Trad that year confirmed that RDNS Hong Kong signed a Joint Venture agreement with the Chinese real estate enterprise, Yango Group, that included training, consulting and project management services.

However, Bolton Clarke said that the Joint Venture did not progress, adding it no longer had any interests in China.

Despite its Australian businesses making more than $27m surplus in the last financial year, overall the company lost $8m due to the deficit in its for-profit operations that included Altura training and RDNS Hong Kong, as well as its corporate cost centre.

Queensland Premier Anastasia Palaszczuk.

Bolton Clarke did not provide a breakdown of those losses which were requested by News Corp, but said the “vast majority” of the losses were due to corporate costs.

In the same company report, its stake in the Chinese joint venture was valued at $2.2 million. Bolton Clarke said its losses in China last year amounted to $521,000.

Corporate tax expert Jason Ward told News Corp Bolton Clarke was one of a number of Australian aged care providers expanding into China.

He said Bolton Clarke’s accounts were difficult to interpret.

“It’s crazy to give the industry more money when it is difficult to say how they are spending it already,” Mr Ward, who works for the Centre for International Corporate Tax Accountability and Research (CICTAR), said.

“We want full transparency on how that money is being spent. If public money is given, it should be publicly accountable.”

Shadow Minister Aged Care Clare O’Neil said the sector “unquestionably” needs more federal funding, but “providers must be prepared to meet higher benchmarks of accountability and transparency”.