Margin call on ABC Learning directors 'cost Groves $77m'

WARRING ABC Learning co-founders Eddy and Le Neve Groves pocketed less than $1 million after a margin call forced them to dump shares, a document filed in the Supreme Court reveals.

WARRING ABC Learning co-founders Eddy and Le Neve Groves pocketed less than $1 million after a margin call forced them to dump shares, a document filed in the Supreme Court reveals.

The estranged couple made a paper loss of $77 million in a single margin call.

Dr Groves is suing her entrepreneur husband for $44.2 million in the Supreme Court, alleging that he "unjustly enriched" himself at her expense by selling her shares in ABC.

She also alleges Mr Groves did not pay her dividends worth $10.7 million.

Dr Groves is also suing Citigroup Global Markets Australia and BT Securities Ltd, alleging they were not authorised to sell her shares.

Mr Groves and Citigroup have not responded to the claim filed in the Supreme Court in October, but BT Securities this week lodged a notice of intention to defend the claim.

"BT Securities denies each and every allegation contained in the statement of claim," the notice states.

The BT document shows that the estranged couple took out margin loans against a total of 12 million ABC shares in 2004, 2005 and 2006.

Dr Groves -- who co-founded ABC Learning with Mr Groves in 2000 -- handed over 6 million shares as security for her estranged husband's $25 million margin loan, the document says.

When ABC Learning shares peaked at $8.63 in December 2006, the 12 million shares would have been worth $103.5 million.

But in February this year, the market price of ABC shares plunged, lowering the value of the couple's 12 million shares to $17.3 million.

In March, after BT made a margin call, the couple sold all the shares for a total of $26.5 million. They received just $970,029 in their joint bank account after repaying the margin loan -- giving them a paper loss of $77 million.

The loss does not take into account shares sold as a result of a margin call by Citigroup.

In her statement of claim, Dr Groves alleges that she held 17 million shares in ABC in February this year. Had Dr Groves held them at the December 2006 peak, they would have been worth $146.7 million.