The many extracts on these pages are from copyright material. They are owned by the reference given or its owner. They are reproduced here for educational purposes and to stimulate public debate about the provision of health and aged care. I consider this to be "fair use" in the common interest. They should not be reproduced for commercial purposes. The material is selective and I have not included denials and explanations. I am not claiming that the allegations are true. The intention is to show the general thrust of corporate practices as well as the nature and extent of any allegations made. Because adverse allegations are so common I have assumed for the purpose of these pages that there is some substance to them.

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This web page examines the history of the Gribbles Group, primarily a second tier provider of laboratory services from 1936. It traces its growth during the late 1980s, the 1990s and early 2000s, it records its global expansion, and finally examines its collapse and sale in 2004. During that period the company and its controversial CEO aggressively fought a continuous running legal battle with the tax office, with the health regulators who accused it of illegal and unethical practices, and with financiers and those who were owed money. There were complex corporate arrangements, and financial dealings which skated the edges of legal conduct and required regulatory investigation or ended in court.

 Australian section   



 Please Note:- I am not claiming that the many allegations and criticisms in the material on this page are all true. In fact Gribbles has aggressively attacked and defended itself against its many critics and it has paid few if any fines. What is clear is that a number of agencies felt strongly about Gribbles and its CEO, Wallace Cameron's activities. They attempted to fine them or recover taxes. My argument is that with so much smoke there is likely to be a significant fire. The press extracts speak for themselves. My comments are therefore based on the assumption that there is substance to some if not all the criticisms and my comments are made on this basis. I am not claiming that what Gribbles did was illegal, but I am concerned that it was not appropriate and that it did not meet the standards of probity required for a provider of health care.



Gribbles Group and its controversial CEO, past tax lawyer, Wallace Cameron, provide another fascinating insight into the corporate marketplace and the sort of people who prosper there. Cameron displays similarities to other corporate executives in Australia including people like Edelsten, McGoldrick, and Wenkart - and to a lesser extent Bateman, and even Catchlove and Smedley.

The large number of allegations and, what many would feel are undesirable practices have been aggressively denied and contested through the courts. The issues have consequently been complex. They have not always been resolved. Their volume and the overall impression from reading the reports is persuasive. They will need to be documented and addressed with some care.

To simplify the issues I will start in part 1 by telling the Gribbles story as it grew from a single pathology business founded in 1936 to Australia's third largest pathology provider and large multinational, and then rapidly collapsed in 2004. In part 2 I will return to explore individual issues and people.

Of particular interest were the accolades from an enthusiastic market and politicians when it looked as if Gribbles would make money. This was in the face of allegations of unsavoury and even illegal business practices. Everyone chose to simply look past all this. Had Cameron been business wise and financially successful the way in which Gribbles had stretched the limits of acceptable behaviour may well have been glossed over. The criticisms came when Cameron failed to meet the financial objectives he had promised.

As I read his character, his views of what was acceptable were individual. He was not the sort of person who could be challenged. These views matched his interests. The strategies adopted and the complex structures set in place matched his rationalisations and justifications. If he is like many other similar corporate leaders in health care then he did not see himself as doing anything wrong (for him this meant illegal). He hotly contested each issue.



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Part I


The Story of Gribbles' Early Growth
1936 to 2001

Gribbles claims it was founded as a South Australian pathology practice in 1936 but it may not have been called Gribbles then. A Dr Michael Gribble joined the practice in 1960 when there were only 8 staff members. He was still practising in the business in 1996.

Wallace Cameron, a young Tax Lawyer with a penchant for challenging the tax office in court, enlisted the financial support of the controversial and mysterious Bruce Matheson. Mathieson was a poker machine operator and was involved in Casinos. Together they bought a controlling interest in Gribbles in 1987 and Cameron became CEO.


Member of a winning team for 36 years The Advertiser March 7, 1996,
Healthy Outlook For Pathology Play Shares Magazine November 1, 2001

2004 Review - the purchase of Gribbles in 1987

One of the last remaining partners, Norris Carter, sold the business to Mr Cameron in 1987. At the time, Victorian poker-machine king Bruce Mathieson was a partner but his stake was eventually sold to other parties.
Gribbles' $121m man Australian Financial Review November 4, 2004

In 1996 Matheson sold his half of Gribbles to the Malaysian company Berjaya group. At the same time Gribbles commenced operations in that country. Berjaya in turn sold its 49% of the company to Ian Trahar's West Australian company Revesco in 1999. In 2001 Gribbles, still a private company listed on the sharemarket by doing a reverse takeover of market listed Revesco (now renamed Medical Care Services). Cameron retained 40% of the company and was the controlling share holder.

Cameron commenced the consolidation of the industry during the 1990s by buying up smaller practices. Gribbles did not target hospitals and the more specialised services required in them. Its customers were the general practitioners and it set up a large number of pathology laboratories to service their needs. These laboratories provided more limited basic services and either sent material to their laboratory in Adelaide or contracted more complex work to companies like Mayne and Sonic. Sonic had adopted a different model electing to manage a small number of state of the art laboratories very efficiently and transport specimens to them.

It is interesting that it was government pressure which initiated the consolidation and which pressed for global expansion in the face of allegations about the company's conduct. During the 1990s Gribbles was Australia's largest pathology company

Gribbles was soon in conflict with the Health Insurance Commission which attempted to investigate it for paying kickbacks to doctors. It is consequently likely that it did not have a good reputation among the medical establishment for probity or for providing state of the art pathology services.

Essentially Gribbles was a profit focussed "second-tier operator" but no one had the courage to say so until 2005, long after Gribbles had collapsed and been sold. The medical establishment had been wary of it.

Cameron must have been very persuasive. For some years press reports described Gribbles scattered service as Australia's most efficient pathology group.

As a consequence Gribbles never attained more than 11% of the Australian pathology market. It missed an opportunity to more than double in size and move centre stage when it allowed Mayne Health to outbid it for the large Queensland Medical Laboratories (QML) in 2002. Gribbles was hotly tipped, as many doctors at QML did not want to work for Mayne. Cameron either could not raise the cash or simply refused to pay so much.

By the end of 2001 it had a strong market share in Victoria (28 per cent), South Australia (40 per cent) and WA (8 per cent). It later expanded into NSW but did not perform well there.

1996 Consolidation and government

Gribbles Pathology, a private company employing 1000 people in three States, is Australia's largest pathology group. It provides clinical tests for an average of 7000 patients a day in SA, Victoria and Broken Hill.
Federal government pressure on pathology costs and margins in recent years have forced several of the nation's oldest established pathology practices to merge, and some interstate practices have closed.
Medical firm's Asian coup $34.5m deal to create pathology world leader The Advertiser March 7, 1996

1999 Scope of operations

Gribbles has a significant interest in the Victorian and South Australian pathology markets as a service provider via an extensive network of pathology collection centres and laboratories for the collection and processing of human and veterinary pathology tests. In addition Gribbles carries on the businesses of radiology, cardiology, audiometry, lung function tests, environmental testing, and provides logistical support to a number of medical practices in Victoria.
Major Investment in Gribbles Pathology Group Australian Associated Press August 6, 1999

2001 Merger with MCS (previously Revesco)

Control of MCS, which will be renamed the Gribbles Group, will fall to Gribbles managing director Wallace Cameron, whose interests will hold about 41 per cent of the enlarged company.
Gribbles is regarded as the best-performing pathology player in Australia, ahead of competitors Sonic Healthcare and Mayne Nickless.
MCS Investors Vote To Pick Up Rest Of Gribbles The West Australian May 31, 2001

2001 Consolidation

- - - - and recently merged Gribbles's 25 laboratories into a major corporate body, boasting medical centres and radiology, valued at $395 million.

Just like Sonic, Gribbles grew through the economies of scale generated by acquisitions, new technology, and from the enthusiastic ordering of tests by Australian doctors. With business interests stretching the globe, the Melbourne barrister turned entrepreneur now controls $150 million worth of Gribbles stock.
The Rise And Rise Of Medicare Millionaires Australian Financial Review November 20, 2001

2002 Laboratory distribution

Gribbles runs two dozen labs to service its market share, compared with Sonic, which has four labs to service about three times the volume.
Predators And Prey Shares Magazine January 1, 2002

2002 Efficiency and QML sale

Macquarie Equities health care analyst John O'Connell says Gribbles is the most efficient of the listed pathology operators and he "looks to the outcome of the likely QML trade sale as the next catalyst".
Gribbles Seen As Winner In QML Race Australian Financial Review June 12, 2002

2002 Misses a key opportunity

Gribbles Group can't be too happy with the market's reaction to rumours that Mayne Group has beaten it in the bidding for privately owned Queensland group QML.
As for Gribbles, the group could well have lost the race to become a major player in the pathology industry. Sonic Healthcare has 43 percent of the market, Mayne 20 per cent, which would jump to 32 per cent if the rumours about QML are true, while Gribbles would languish with just 10 per cent.
Gribbles gripes The Sydney Morning Herald June 26, 2002

2004 A GP service - not hospitals

Gribbles typically services the general practitioner market and has so far failed to gain a foothold in hospitals, whereas Healthscope currently outsources an estimated 725,000 cases of pathology work to other providers, including Mayne group and Sonic Healthcare, each year.
$271 million bid for Gribbles The Age October 21, 2004

2005 Really a second tier operator

Gribbles is a second-tier operator in pathology. It has never offered a complete range of tests and relied on a high turnover and low prices to keep revenue up.
Path test BRW December 1, 2005

2005 A fringe operator

Dixon is also keen to develop more professional relationships with GPs and specialist doctors. Partly because of its history, Gribbles has always been regarded as something of a fringe operator and struggled to attract the top rung of pathologists to work for it. That has meant it has not carried out much of the specialised pathology work required by hospital doctors.
GRIBBLES SAGA NOT OVER Business Review Weekly January 27, 2005


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The Revesco/MCS story

Ian Trahar's West Australian resuscitated investment company Revesco entered health care in 1999 buying general practices, day care facilities, radiology, pathology, and paramedical services in Western Australia. It renamed itself Medical Care Services (MCS). It bought Berjaya group's 49% holding in Gribbles. In 2001 Gribbles did a reverse takeover of MCS and then changed MCS name back to Gribbles. The MCS general practice based subsidiary was never profitable and Gribbles had difficulty selling it. In January 2004 the new company NMIG bought it.

The Revesco/MCS's story, its relationship with Gribbles, the reverse takeover and the subsequent performance of this subsidiary are described on another web page,

Click Here to go to the Revesco/MCS page


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Growth and Acquisitions

Gribbles was a private company and its early growth by the acquisition of local human and veterinarian pathologists is not recorded in the press. An indication of the scope of its operations is given in Jobson's Yearbook near the end of 2002 a year before it started to fall apart.

2002 Scope of operations

Gribbles has a significant interest in the Victorian and South Australian pathology markets as a service provider via a network of pathology collection centres and laboratories for the collection and processing of human and veterinary pathology tests. In addition Gribbles carries on the businesses of radiology, cardiology, audiometry, lung function tests and environmental testing, and provides logistical support to a number of medical practices in Victoria. Gribbles Malaysia provides pathology services in Malaysia, Singapore, Indonesia, Brunei and Southern Thailand.
The Gribbles Group Limited. Jobson's Yearbook October 31, 2002

Most human pathology operations were in South Australia and Victoria, with Revesco/MCS' having more modest operations in Western Australia. The company moved into NSW during 2002 buying Citywide Diagnostics Pathology and Universal Diagnostic Laboratories, both in Sydney. It also bought another human pathology business in Victoria. Even though Gribbles was losing money in 2002 and 2003 Cameron pressed on with acquisitions in Australia and Asia increasing debt. He made promises that the company would not meet. His credibility evaporated.

2002 Growth reference

The Gribbles Group Limited (GGL.AX) Recent Acquisitions & Performance. Australian Stock Exchange Company Announcements May 2, 2002

2002 Growth

In the last seven months of the financial year, Gribbles made eight acquisitions.

Managing director Wallace Cameron defended the expansion program, saying it would boost margins in 2002-03.
Stock to Watch: GRIBBLES GROUP Australian Associated Press Ralph Wragg Equities News October 22, 2002

2003 Growth

The Gribbles Group Ltd has acquired three human pathology businesses in NSW and WA.
Gribbles buys 3 human pathology firms in NSW and WA Ralph Wragg Australian Business News September 10, 2003

2003 Growth

During the 2002 financial year, the company expanded to Singapore and India, and acquired ten businesses. They acquired a further two prior to the end of the financial year, Endemic Pathology in New South Wales and Alpha Biological Laboratories in Auckland and Christchurch. Of the total twelve, five of these businesses were in human pathology, four in veterinary pathology and three were analytical laboratories.
The Gribbles Group Limited. Jobson's Year Book July 1, 2003

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Veterinary Pathology.

Veterinary pathology was one of the peripheral pathology related businesses in which Gribbles participated. It had veterinary laboratories in Victoria. One of these was Victoria Veterinary Pathology Services (VVPS) in which Gribbles invested, and which it later acquired. Its founder Judith Slocomb became a senior manager in Gribbles, a millionaire and a winner of prestigious business awards. In 2003 it won a major contract in Victoria under controversial circumstances. This is described later on this page.

Gribbles also acquired veterinary pathology businesses in New Zealand.


Preliminary Final Report. Australian Stock Exchange Company Announcements September 17, 2001
Gribbles wins 5-year vet pathology contract in SA Ralph Wragg Australian Business News November 5, 2003

Environmental analytical services

Other businesses acquired included Amdel Ltd, a business that tests environmental, petroleum and mineral samples. It is interesting that in spite of the many concerns about Gribbles at this time they were able to get senior ministers in both NSW and Victoria to officially open their laboratories.


Gribbles puts directors overboard Australian Financial Review March 5, 2002
(AEGGL) Gribbles opens $1.5m Amdel facility in Newcastle Ralph Wragg Australian Business News July 14, 2003
MINISTER OPENS $3 MILLION LABORATORY FOR GRIBBLES Australian Company News Bites August 13, 2003

Molecular Science

2003 Molecular Science

Gribbles Group Ltd announced the establishment of a subsidiary company, Gribbles Molecular Science, to expand its presence in genetic testing. Almost all research relating to biotechnology today involves genomics and related fields.
GRIBBLES ESTABLISHES GRIBBLES MOLECULAR SCIENCE Australian Company News Bites September 15, 2003

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 Global Expansion

Malaysia:-  It is interesting that an essentially second tier pathology business was the first to go international. This occurred when Malaysia's Berjaya group, of Kuala Lumpur bought half of Gribbles from Mathieson in 1996. This gave Gribbles a significant holding in Malaysia and there were grand plans to expand. It is interesting that it was government that initiated and then strongly supported this foreign venture. Berjaya also held 20% of Alpha Healthcare. Gribbles continued to expand into other countries.

The partnership lasted only three years. It is not clear whether Cameron and Berjaya were poor bedfellows or whether it was the Asian crash which caused them to pull out. They sold their half to Revesco/MCS in 1999.

1996 Berjaya buys into Gribbles

Berjaya's proposed Australian acquisitions - - - - - - - - and pay $34.7 million for 50 per cent stakes each in Advanced Medical Technology Ltd and Victorian-based Gribbles Pathology Trust.
The intention is for Gribbles to expand its operations into Malaysia, Thailand and Indonesia.
Berjaya profit falls after buying spree announcement THE WEEKEND AUSTRALIAN January 20, 1996

1996 Governments role and grand plans

Adelaide is to become the headquarters of one of the world's biggest pathology groups, opening the way to the large Asian medical market. Adelaide-based Gribbles Pathology has sold a 50 per cent stake of its business for $34.5 million to Malaysia's Berjaya group, of Kuala Lumpur, which has extensive interests in the Asian leisure, private hospital and health care industries.

Gribbles' medical director, Dr Richard Abbott, said yesterday 20 new pathology laboratories would be established in Malaysia this year, followed by 10 in the Philippines and 80 to 100 in Thailand and Indonesia within the next three to five years.
The SA Health Commission brought the company and the Malaysian group together and helped negotiate the deal.
Medical firm's Asian coup $34.5m deal to create pathology world leader The Advertiser March 7, 1996

2002 Growth in Asia

The company is expanding into Asia, with laboratories in Malaysia, Indonesia, Brunei and Thailand already in operation.
Gribbles in a healthy position. Shares (abstracts) January 2, 2002

India :- Gribbles entered into a joint venture in India but this did not prosper.

2000 Enters India

Gribbles has signed a memorandum of understanding with the Dr Reddy's Group of Hyderabad which could make the joint venture the biggest pathology provider in India.
Gribbles would base its India strategy on its Malaysian operation, with the main difference being the Dr Reddy's Group's relationships with more than 400,000 general practitioners and the majority of hospital operators in India.
Gribbles Set To Expand To India The West Australian May 25, 2000

2004 Lost money

Dr Reddy's has been looking to quit the joint venture for two years, and Gribbles said last month it was seeking a new partner to fund the business or other funding and expected to resolve the fate of the Indian arm this quarter.
Australian Mayne considers bid for Gribbles-report. Reuters News September 16, 2004


United Arab Emirates

2001 Emirates

- - - - - has entered into a memorandum of understanding (MOU) with the Gibca Group of United Arab Emirates (UAE) with the intention of establishing pathology laboratories in the Emirates.

Under the MOU, the two companies will also assume management of several existing hospital laboratories.
Gribbles will have a 49 per cent interest in the joint venture (the maximum allowed under current regulatory requirements) and will be responsible for providing all key management personnel.
News in brief : MEDICAL CARE Australian Associated Press May 11, 2001


2001 Singapore

Gribbles Malaysia has entered into an agreement to acquire Zenith Laboratories, a Singapore based private pathology laboratory. It is expected to complete this acquisition by 31 October, 2001.
Preliminary Final Report. Australian Stock Exchange Company Announcements September 17, 2001

New Zealand

2002 Four vet labs

PERTH-BASED health care company Gribbles Group has announced plans to buy four veterinary laboratories in New Zealand. - - - - - The four laboratories are operated by Agri Quality, a state-owned enterprise which supplies equipment in Australia and NZ and have a combined revenue of about $NZ5 million.

2002 Another Vet lab

The Gribbles Group Ltd has agreed to purchase Alpha Scientific Ltd of New Zealand.

Alpha Scientific is a Hamilton-based diagnostic laboratory, providing primarily veterinary pathology services.
Gribbles Group to buy NZ diagnostic laboratory December 5, 2002

2003 And another

The acquisitions, along with the previously-announced acquisition in NZ of Northland Pathology, which was completed in July, will be funded by existing debt facilities at a cost of about $23 million.
Gribbles buys 3 human pathology firms in NSW and WA Ralph Wragg Australian Business News September 10, 2003



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Enthusiasm and Disenchantment with Gribbles

Cameron and Gribbles clearly presented themselves well. The market was initially upbeat. Significantly some major investors were a little more insightful and sold down after the backdoor merger and listing in 2001.

Some analysts were sceptical about Gribbles prospects and its financial statements, questioning the information supplied and its accuracy. Others accepted Cameron's glowing projections and supported the company. By the end of 2003 the sceptics dominated and few of Cameron's positive statements were accepted at their face value.

Strategies to make the books look better included the manipulation of large intangible assets. As profitability dropped Cameron found a tax loophole which allowed him to add millions to the balance sheet projections. This proved embarrassing as the accountants refused to go along with it. 

Nov 2001 Some wary

While the market's initial response to the reverse takeover of Gribbles, which is today Australia's third largest pathology player, was positive, Commonwealth Bank and BT Funds Management both ditched a large slice of their holdings.
"It also has strong management, led by Wallace Cameron. We believe Gribbles is a solid company that should be able to grow its earnings per share by 15 per cent a year over the next three years," says Henderson.
Healthy Outlook For Pathology Play Shares Magazine November 1, 2001

Apr 2002 Performance down

This (poorer performance compared to Sonic) has been reflected in the derating of rival pathology operators Mayne Group and Gribbles Group, which have fallen 22.5 per cent and 35.2 per cent respectively this year.
New Theme Is Stock-specific Buys Australian Financial Review April 22, 2002

Jun 2002 Positive spin

Pathology group Gribbles has painted a rosy picture of continuing earnings growth and highlighted plans for further acquisitions.
Gribbles In Tip-top Shape, Signals More Acquisitions Sydney Morning Herald June 14, 2002

Sept 2002 Confidence ebbing

As for Wallace Cameron at Gribbles Group (see graphic), he just can't seem to manage market expectations. The pathology operator tumbled 7 cents to 58 cents after yet again overpromising and underdelivering with a full-year net profit of $2.2 million compared with a consensus forecast of $6.3 million.
Deadline looms for MacBank. Australian Financial Review September 13, 2002

Nov 2002 Share price falls

The share price of Gribbles has fallen by 46 per cent this year as analysts have criticised the diversity of the group's practices.
Good prognosis lifts Gribbles.
Australian Financial Review November 22, 2002

Nov 2002 Balance sheet questions

But back to the balance sheet which, on closer inspection, shows that Gribbles boasts $323 million in intangible assets, including brands and licences. The bottom line of the balance sheet shows that net shareholder equity is actually only $293 million.
He's fairly mean, that Gribbles boss The Age November 22, 2002

Nov 2002 Positive spin and promises

But earnings would rise faster, as much as 40 per cent before interest, tax and depreciation and amortisation, thanks to continuing rationalisation of the group, shareholders were told at yesterday's annual meeting in Melbourne.
Gribbles revenue to top $50m. The Age November 22, 2002

Dec 2002 Upbeat presentation but reservations

The managing director of Gribbles Group, Wallace Cameron, gave an upbeat presentation to shareholders at the annual general meeting on November 21.
Many health-care industry analysts are cautiously waiting to see earnings before embracing the stock. They acknowledge that Cameron has been successful in building a pathology business, but he is known to be prone to making optimistic business forecasts.
Gribbles Faces Testing Times Business Review Weekly (Australia) December 12, 2002

Mar 2003 Investors pulling the plug

Gribbles shareholders yesterday pulled the plug on their investment as the pathology and analytical services company reported a lower net profit for the December half-year.
The plunge pushed the share price to 51, close to the record low of 49 seen last September.
Investors desert Gribbles after weaker result. The Age March 5, 2003

Sept 2003 Claiming sound financial position

Gribbles said in the report - - - - - - - - - - - The group is in a sound financial position. Good organic growth is expected in all businesses -
NET PROFIT UP 367 PER CENT TO $10.174 MILLION Australian Company News Bites September 2, 2003

Nov 2003 Dissapointment

It is a stock that was embraced by many a professional investor, but it has disappointed no end and some have cut their losses and moved on to greener pastures.
Gribbles is the outfit that was injected into a listed structure in 1999 and 2000; money was raised by the bagful by the likes of Warburg and the performance ever since has been nowhere near what investors expected.
Gribbles' MD ailing; so are the shares The Age November 12, 2003

Nov 2003 Stock downgraded

UNCERTAINTY over Gribbles' earnings has prompted Macquarie Equities to downgrade its recommendation on the group to underperform.
Gribbles Group The West Australian November 13, 2003

Mar 2004 Accountants reject the accounts

The tax woes of pathology company Gribbles Group continued yesterday when its shares sank to a five-year low after it was forced to restate its financial accounts.

Gribbles' auditors, Deloitte Touche Tohmatsu , issued two qualifications to the company's half-year accounts, relating to its treatment of two tax matters. Deloitte took a different view to the board on the treatment of a $23.4 million claim by the Australian Taxation Office against Gribbles. The claim related to tax losses linked to an asset sale the company made in 2000.
Gribbles' Stock Dives Over Audit Queries Australian Financial Review March 3, 2004

Sept 2004 Forced to redo accounts

Gribbles Group has been forced to pull a $5.7 million income tax benefit from its books over uncertainty surrounding rules for copyright tax deductions.
Given the uncertainty of the rules, the company has de-recognised the future tax benefit in the financial notes of its annual report released last night. It follows $35.5 million of write-downs recorded in the financial year just ended.
Gribbles taxed over copyright results The Age September 30, 2004


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Gribbles Falls Apart

It is clear that by the end of 2003 a number or investors and people in the company had realised that there were major problems. The chairman John Moule resigned and soon after Wallace Cameron took sick leave and then resigned. Other senior staff also left.

The company's bankers Westpac had other problems with Cameron. They refused to renew Gribbles' loans. Gribbles were forced to renegotiate the loan with ANZ at a higher rate.

In response to pressure from bankers, the new chairman Bernard Wheelahan initiated an outside review. It is clear that this revealed that the company was no longer a viable operation. The new chairman did not disclose this publicly until after Gribbles was sold. He remained up-beat about prospects and put the company up for sale.

Feb 2004 Signs of further problems

The company recently sold 26 medical centres, 14 radiology practices and a day surgery for $14 million, and earlier this month chairman John Moule retired. Experts say those two factors point to potential further problems, and many say the company regularly fails to meet earnings expectations.
BRIEF CASE - THE GRIBBLES GROUP The Age February 11, 2004

2004 Market losing confidence

There continues to be concern surrounding this company. The market seems to have low confidence in management guidance and there seems a certain lack of direction of operations. Accounting practices continue to be of concern and with further difficulties in Asia arising, the company looks to have a tough 12 months ahead.
Gribbles Group Ltd (GGL) Sunday Times (Perth) February 15, 2004

May 2004 Wallace on leave - an independent review - problems

Can Wallace Cameron survive as chief executive of the troubled Gribbles Group? In what represents a big power shift, directors of the out-of-favor pathology company have exerted their influence to force an independent review of Gribbles' operations and strategy.

Cameron was the architect of Gribbles' troubled expansion program of the past two years. Among analysts and investors, his management is considered an important factor in the company's poor market standing. Cameron, who has 43% of the company and can veto moves for reform, has been on leave for several weeks and the company is not saying when he will be back.

Gribbles, with about 14% of the market, is Australia's third-largest private pathology provider. Since late 2003, the company has been criticised by analysts and large investors for its inadequate disclosure, failing to live up to the earnings guidance it has provided investors, and for the patchy results from its acquisitions program. Investors baling out have pushed the company's share price to its lowest level since listing four years ago. It is now trading at 35¢, less than a third of its peak of $1.39 in 2000 and 28% lower than its January 6 price of 49¢.
The Temperature Is Rising Business Review Weekly May 13, 2004

Jun 2004 More departures - bloodletting

Chief operating officer Peter Anargyros and corporate manager Glenister Lamont have already departed, and more managers are expected to follow, The Australian Financial Review has learned.
The biggest scalp sought by angry shareholders and some Gribbles directors is that of chief executive Wallace Cameron, who has been on what the company claims is "unexplained" leave since April.
Bloodletting To Cleanse Pathology Group Australian Financial Review June 1, 2004

Jun 2004 Cameron fired

His departure (Cameron) was cause for celebration in the market as Gribbles shares rose 3 ¢, or 10 per cent, to 32.5 ¢.

Interim chief executive Andre Carstens is negotiating with Gribbles' leading bankers over its $130 million debt, a mix of short-term and long-term loans held primarily by ANZ Bank.

A review into Gribbles' affairs was launched in April after the company shocked investors with an earnings downgrade. The company's chief operating officer and corporate manager departed recently.
Gribbles Chief Quits After Crisis Review Australian Financial Review June 2, 2004

Jul 2004 Problem with bankers

Still, with debt of $130 million, Gribbles is currently negotiating a rollover of its funding facilities and conducting a rumoured bank-requested strategic review.
A canny Cameron takes a new shot at Gribbles The Age July 3, 2004

Nov 2004 Confessions after Gribbles was sold to Healthscope - problem with banks

GRIBBLES chairman Bernard Wheelahan wore a black tie yesterday - - - - - , telling a handful of shareholders the company had been saved from the brink of collapse earlier this year.

He said Healthscope's $284.6million takeover offer of 63c a share was a satisfactory outcome for investors and employees. "We could have disappeared altogether," Mr Wheelahan said, describing the past year as "trying and traumatic".
That prompted banker Westpac to pull out of talks to roll over the company's debt. Gribbles eventually received funding from ANZ, but at a high cost. "The only way out of a quagmire is to put one foot in front of another and that is what (fellow director David Heaney) and I did," Mr Wheelahan said.
Gribbles chairman talks up takeover The Australian November 30, 2004


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The Sale of Gribbles

Gribbles had called in insolvency experts to advise them but tried to hide this.

2004 Called in insolvency experts but did not fully disclose this

Australia's leading insolvency practice, Melbourne-based KordaMentha, has been called in to rescue troubled pathology group Gribbles Group.

KordaMentha is involved through its affiliate consultancy company, 333 Performance Management, The Australian Financial Review has learned.

Gribbles informed the market in April it had hired 333 Performance Management to "conduct a review", but neglected to mention it is part of KordaMentha and uses its offices and employees.
Two Marks team lends a hand at Gribbles Group Australian Financial Review July 2, 2004

The whole sale process was bedevilled by the fact that Cameron had never declared his ownership of 40% of Gribbles. This was held in the name of an offshore controlling shareholder, EC Medical Investments. He claimed that he acted for them but refused to disclose who the actual owners were.

No one was prepared to bid for Gribbles when they did not know who the major controlling shareholder was. Cameron refused to say and an investigation by Gribbles board revealed only a complex paper trail of companies in other countries and in tax havens. It was only after authorities threatened to confiscate the shares that Cameron disclosed that his children were the ultimate owners and he acted for them.

Meanwhile Cameron attempted to find a bank or other investor who would join EC Medical in buying the company and taking it private. He was unable to do so.

Both Mayne and Sonic had competition issues and elected not to bid for Gribbles. Healthscope, which did not own any pathology laboratories, was ultimately the only bidder. The board recommended that the bid be accepted but Cameron refused to do so forcing Healthscope to increase its bid.

At the same time Cameron applied further pressure by using the dominance of EC Medical to mount a battle for control of the board which seemed likely to succeed.

Cameron was having many costly legal problems in other areas. He was eventually pressured by his advisers to accept Healthscope's bid.

The takeover of Gribbles by Healthscope, completed in December 2004 is described on one of the Healthscope pages, as is Gribbles subsequent progress as a Healthscope subsidiary. I am writing here only about some aspects of Gribbles behaviour during the sale.

Click Here to go to the relevant section of Healthscope's story.

Jun 2004 EC Medical

The largest shareholder in Gribbles, with a 43% stake, is the Belgian company EC Medical Investments NV. Among analysts and fund managers, it has always been assumed that EC Medical Investments was ultimately owned by Cameron; Cameron denies this, saying all he does is "speak" for the shares.

With Cameron no longer running the company, the fate of the parcel of shares is unclear. Against the background of health-sector rationalisations, directors of Gribbles are concerned enough to have called in lawyers in an attempt to uncover who owns EC Medical Investments - with no results so far.
Stitched-up sector Business Review Weekly June 24, 2004

Jun 2004 Cameron wants to buy Gribbles

The ejected chief executive of the Gribbles pathology business, Wallace Cameron, is stitching together a management buy-out proposal for the troubled diagnostics business in a deal worth $300 million.

But Mr Cameron's comeback could be derailed by any one of a number of private equity groups now circling the group.
CEO plots Gribbles comeback Australian Financial Review June 24, 2004

Jul 2004 Cameron doubtful

Doubts have been raised about the likelihood of a private equity firm backing the secretive Cameron.

But according to Cameron, "everything will be fixed" within two weeks.
A canny Cameron takes a new shot at Gribbles The Age July 3, 2004

Jul 2004 Cameron can block other bidders

However, analysts are starting to question if Gribbles will attract a formal takeover bid, given that the market is now aware Mr Cameron's children can block any grab.
Decision day on Gribbles Australian Financial Review July 20, 2004

Aug 2004 More losses -- Up for sale

PATHOLOGY group Gribbles has opened a data room for interested bidders to trawl through, including ousted founder Wallace Cameron, as the board continues to flirt with the possibility of selling the company.

Gribbles yesterday reported a hefty full-year $51.3million loss, weighed down by $35.5 million of asset writedowns and restructuring costs.

The charges included the write-off of a $9.4 million loan to its partners in its 49 per cent owned loss-making Indian pathology joint venture trail-blazed by Mr Cameron but bankrolled by Gribbles.
Gribbles looks for new partner, but open to sale The Australian August 25, 2004

Sep 2004 Not enough information supplied

Gribbles is also losing market share to Sonic and Mayne in pathology, making it even more of a stretch to meet market expectations, and has to resolve the future of its Indian operations.

There have long been other bugbears in its profit reporting, including the way it separates unallocated costs from its domestic pathology operations, making it hard to reliably value the core business.

What has also frustrated bidders is that there's a lot of information missing in the data room, including operational budgets needed to secure debt financing for any bids.

With deposed founder and major shareholder Wallace Cameron also running the numbers, the board for some reason doesn't appear to be serious about putting the company into play. Without knowing what Cameron's position is, it's difficult for any bidder to make a serious bid. This sort of feedback suggests the process is fragile at best, even though there might be a good business under all this mess.
Obstacles hinder Gribbles sale Australian Financial Review September 1, 2004

Oct 2004 Healthscope bids

Healthscope said it will offer Gribbles shareholders 60 cents cash per share, a three-cent premium to the target's last trade at 57 cents.

The independent directors of Gribbles have recommended that its shareholders accept the offer in the absence of a superior proposal.
Australia's Gribbles: Healthscope Makes Cash Offer Dow Jones International News October 20, 2004

Oct 2004 Risks for Healthscope

Moreover, the figures assume Gribbles' accounts are what they seem, but HealthScope investors can only hope the drawn-out talks mean there was very careful due diligence.
Market Wrap : HEALTHY SCEPTICISM Australian Financial Review October 22, 2004

Oct 2004 Gribbles tries to take control of the board

Gribbles' notice of meeting for its annual meeting next month was released last night. It says EC Medical Investments, a secretive European trust controlled by Cameron and which owns 43 per cent of Gribbles, has nominated two people to join Gribbles as directors.
Cowell and Home will join Cameron, who is still a director of Gribbles. It gives EC Medical Investments effective control of the company. They outnumber the other independent directors, Bernard Wheelahan and David Heaney.
Cameron goes for Gribbles' jugular Australian Financial Review October 28, 2004

Nov 2004 Cameron under pressure

However, since resigning from the company several months ago, he no longer has his $400,000-plus yearly salary to fall back on. With mounting legal fees and court fines, he is believed by sources to be facing pressure from advisers to accept Healthscope's offer.
ATO casts net beyond Gribbles
The Age November 1, 2004

Nov 2004 Cameron prepared to sell at his price

Cameron, who has a 43% shareholding in Gribbles, has indicated he may accept a revised offer of 63 cents a share, three cents a share higher than the original bid, according to the newspaper.
Healthscope May Increase Gribbles Bid Dow Jones International News November 2, 2004

Nov 2004 Pressure on Cameron to sell

However, it is believed that Mr Cameron, who is being investigated by the Australian Taxation Office about $10 million in dividends that have flowed to ECMI over the past two years, has been facing pressure from his advisers to sell.

"It's fair to say he has had lots of pressure on him," one source said. "In essence, he hasn't been able to get a bid up with his own consortium of private equity backers . . . and no other bid has surfaced."
Healthscope's 5% lift in offer quickens Gribbles' interest The Age November 3, 2004

Nov 2004 All accept offer

By increasing its offer by 3 a share to 63, Healthscope secured agreement from Gribbles' renegade director and company founder Wallace Cameron.
Healthscope coughs up to win Gribbles Herald-Sun November 4, 2004

Nov 2004 Cameron gets $121 million

Melbourne businessman Wallace Cameron banked $121 million yesterday after quitting his controversial stake in pathology group Gribbles, delivering control to rival Healthscope.
Mr Cameron's final cheque is well below the $270 million the stake was worth three years ago - - - - .
But in recent years Gribbles has come under intense pressure from its shaky balance sheet, buckling under more than $130 million in debt linked to a troubled expansion into the Indian and South-East Asian market.
Gribbles' $121m man Australian Financial Review November 4, 2004

Dec 2004 Healthscope gets all of Gribbles

Healthscope Ltd has achieved the 90 per cent acceptance level for Gribbles Group and intends to declare the bid unconditional.

Jan 2005 Cameron's legacy

- - - - was completed with a $120-million cheque in time for Christmas to Wallace Cameron and his family. But it was not the end of former tax lawyer Cameron's links with Gribbles, or of the controversy that some of the more unusual business deals put in place by the previous management are causing the new owners.
GRIBBLES SAGA NOT OVER Business Review Weekly January 27, 2005




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  Part II
Issues involving Gribbles


Business and Political Background

While the broad account provided above gives some idea of the sort of company Gribbles was and the type of people who were running it, a closer look at some of the many facets gives a far better idea.

In the early 1990s governments embraced economic ideology without any questioning. They were committed to turning health care into a marketplace business like any other. The belief that health was no different to gambling and could be handled in the same marketplace way was not seen as bizarre. In the clinical arena governments brought in US multinationals to impose market values and practices. In pathology Gribbles was the vehicle for their policies. They supported it in spite of the allegations of unacceptable conduct.

The thrust of the many press reports suggests that Gribbles adopted marketplace beliefs and practices without any qualifications. They disregarded the restraints of the health care context. At the time many saw laws forbidding kickbacks as obsolete.

There is no real dividing line between what business considers essential management techniques and what others would consider as dysfunctional kickbacks. As a consequence companies employ a variety of strategies to make kickbacks look legal and prosecution of offenders becomes very difficult. Cameron used his legal skills to good effect to exploit this situation when investigated by authorities.

Mar 2001 Kickbacks

The Health Insurance Act specifically bans pathology companies from providing inducements to doctors, such as free staff or inflated rents, because of concerns about the potential for GPs to over-order and send people for tests they may not need.

Despite the act, and tough penalties including prison terms, health authorities have only recorded one minor fine, against a small operator.
Pathology Giant Faces Kickback Allegations Australian Financial Review March 27, 2001

The HIC attempted to control some of these practices before they were implemented by exercising its right to refuse licences.

Mar 2001 Using licenses to forstall intentions

Medicare laws, which ban inducements, prohibit companies offering doctors above-market rents for spaces within medical centres, but the practice is believed to be widespread in the $1 billion industry.

During the past six months, the HIC is understood to have knocked back more than 30 proposed rental arrangements as part of a tough new approach to enforcing the ban on inducements.
Notwithstanding the matter referred last year to the committee, Gribbles has never been found guilty of any wrongdoing in relation to rents or any other forms of inducements.
HIC Crackdown On Offers Of Inflated Rent To Medics, Australian Financial Review March 28, 2001

Within 5 years of Cameron's purchase of Gribbles it became the subject of a Four Corners documentary and a Senate inquiry into alleged kickbacks. Legal battles and allegations of kickbacks continued into 2004 when the company was finally sold.

1996 Accusations in parliament

According to White in Parliament, one of the leading pathology providers in Melbourne, and which specialised in overservicing, kickbacks and inducements, was Gribbles Pathology Trust. Whose trustee was a company in which the biggest shareholder was our Guangdong Mathieson.

Gribbles encouraged and was proud of the number of staff who secured MBA's. Business-think was all embracing.

Nov 2001 Encouraging MBAs

Henderson (analyst) says Gribbles has a "strong philosophy" in training its medical and technical staff in management skills, which has led to 11 of its pathologists gaining MBA degrees in the past three years.
Healthy Outlook For Pathology Play Shares Magazine November 1, 2001

Judith Slocombe, one of Gribbles' senior managers and winner of many business awards unwittingly makes my point about the difference between individual business ventures and corporate operations. Our opinions differ on the benefits of this and the consequences.

Feb 2004 Well she said it

Veterinarian Dr Judith Slocombe - - - - - - - -
"Then, in 2001, I sold the business to The Gribbles Group. I stayed with the business, as I'd built up industry knowledge and goodwill, did an MBA and became the director of the veterinary division. I had to develop the skills necessary to manage in a corporate environment, which is quite different from being an entrepreneur and business owner.
REAL LIFE: Self millionaires The Australian Women's Weekly February 5, 2004


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Mixing Health and Poker Machines

To the economic ideologists there was no difficulty with the peculiar logic of a gambling king who built up a poker machine empire and a lawyer advising clients on tax avoidance being in charge of health care services. The same cultural factors, values, morals and business practices could be applied. This was the market medicine that the disorganised and inefficient health system required.

Bruce Mathieson was a coalition party donor and arguably an associate of Kennett, the radical reformist premiere of Victoria. Kennett set out to fund government coffers by encouraging and supporting the gambling industry. Mathieson and Cameron purchased Gribbles Pathology in 1987.

Mathieson's activities and his involvement in Gribbles were aired prominently in parliament. Gribbles relationship with doctors was the subject of a Four Corners program in 1992 and of a senate inquiry.

1995 Mathieson and Gribbles

A MYSTERIOUS, controversial figure, Mr Bruce Mathieson has become the biggest individual operator of poker machines in the state.
Some of his business associations have also attracted attention. Mr Mathieson said he had ``nothing to do with'' alleged kickbacks paid by the company he now owns, Gribbles Pathology.
Poker Machine Operator's Hand Revealed Sunday Age May 28, 1995

1996 Mathieson

If Mathieson was inclined to read, we could direct him to books explaining how he has got rich out of "government rents". On the one hand he targeted the easy pickings in pathology - where the taxpayer hands out $700 million a year for medical tests, with allegations of perhaps $100 million going in overservicing and another $50 million in kickbacks and inducements to doctors.
Now Kennett may know nothing of Mathieson's "activities" in pathology, but it is difficult to believe he did not have some faint knowledge of the way he was plucking the rich fruit from Victoria's gambling tree.


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Political and Market Blindness

If we consider that Gribbles conduct was so widely challenged from 1992 onwards and the subject of an ongoing regulatory battle during the 1990s then the extraordinary positive ambience with which the company was embraced by analysts, politicians and the establishment speaks for the ideological blindness of the times. Like Cameron they would have rejected all allegations as mischievous.

The company was considered to be Australia's largest and most efficient. It was praised by governments, which assisted it in arranging, and supported it in its international expansion as described earlier. The morality of all this is little different to the support given by the US government to the international expansion of corporate health care giants in serious trouble in that country. But for the vigilance of citizens and the integrity of state health departments these US megacorps may well have taken over our health system - and we too might have experienced the subsequent scandal of healthy but anxious citizens being subjected to hazardous cardiac surgery.

One of Gribbles' most successful executives received business awards and accolades. I do not want to belittle Ms Slocombe's achievements but making such awards to an executive of a company whose conduct had been so questioned might be considered a little risky. It is interesting that Healthscope fired her when it took control and she sued for wrongful dismissal.

This adulation continued until questions about the profitability of the company arose. Critics were emboldened to express their reservations. By then politicians were nowhere in evidence.

1997 Praise from the governor

SIR Eric (SA Governor Sir Eric Neal) said the best example he had seen of how success could be achieved was that of Adelaide-based Gribbles Pathology, which, as a result of a previous trade mission only 18 months ago, entered into a $35 million joint venture with a Malaysian group to provide pathology services throughout Asia.
The vice-regal foot in the door The Advertiser March 21, 1997

1997 Praise

The company was founded in 1936 and, through its aims of quality customer service and value, has become Australia's leader in diagnostic pathology testing.
Some of the successful SA companies that form the basis of; the State's burgeoning health industry The Advertiser June 21, 1997

2001 Business accolades for Gribbles staff

But the mother of nine believes women can have it all. She became the perfect example of why last Friday when she was named Telstra's Victorian Business Woman of the Year.
She entered into a joint venture with Gribbles Pathology in 1995. Since then, the company has grown 60-fold in revenue as well as employing 35 full-time workers and providing a training ground for expertise in veterinary diagnostics. The company also adapts new medical technologies. Earlier this year, the company became the National Testing Authority of Australia. Dr Slocombe recently sold her business to the Gribbles Group, staying on as managing director.
When It Comes To Success, One Woman Stands Out The Age August 27, 2001

2002 More accolades

Dr Judith Slocombe has been short-listed as a finalist in the International Woman Inspire Awards 2002 after last year taking out the Telstra Business Woman of the Year gong.
Australian in the running for international business woman award.
Australian Associated Press General News November 28, 2002

In 2003 as things started unravelling Gribbles was nominated for the Monash business awards.

2003 Gribbles awarded

Meanwhile, Mt Waverley-based Movietime Popcorn manufacturer Superpop and The Gribbles Group were named finalists of the Monash Business Awards on February 11.
Business is not so good in Monash. Oakleigh Springvale Dandenong times March 12, 2003

If Gribbles had close political contacts and actively used any connections for political advantage then this is not public knowledge. A senior coalition politician had worked for Gribbles.

2005 Possible political connectons

Ms Worth, who lost her seat to Labor's Kate Ellis in October, was parliamentary secretary for health.

She has been appointed as a senior policy advocate for Canberra-based public affairs company Client Solutions, which specialises in policy advocacy in the health industry.

Ms Worth was trained in nursing and midwifery at Calvary Hospital in North Adelaide and also worked for Gribbles pathology.
Worth finds her feet as health sector advocate The Advertiser June 15, 2005

If there was political influence or abuse of process involving Griffiths in Australia then it may have occurred in a minor scandal in Victoria in 1996.


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 Controversy in Victoria

In 1996 there was controversy and a lot of unhappiness when Victorian Veterinary Pathology Services (VVPS) and Gribbles won a contract for a major animal testing privatisation from the Kennett government. This was a contract awarded to another company only two years before and it had invested to provide the service. In the 1990s Victoria was the Wild West of radical economic reform and there were a number of scandals relating to privatisation. Health care was one victim.

The tendering process for this contract was strongly criticised. Even some of those on the committee had their concerns.

Nov 1996 Gribbles wins contract

VVPS director Judith Slocomb said they would use the Gribbles infrastructure to provide veterinary pathology services in Bendigo, Seymour, Shepparton, Kyneton, Wangaratta, Mildura, Benalla, Bairnsdale and Warrnambool. But there are no Gribbles human pathology labs in Benalla and Bairnsdale.
CENTAUR CLOSES UP Weekly Times November 6, 1996

Nov 1996 Immediate consequences

Victoria's animal testing services have been thrown into turmoil by the closure of the company behind the State Government's first big privatisation project.

Centaur International Pty Ltd called in administrators on 31 October after it lost its two-year-old contract to run the state's four rural veterinary pathology labs. It is believed to have debts of between $2 million and $3 million.
Labs Shutdown Disables Vets The Age November 12, 1996

Jan 1997 An extraordinary decision?

The Opposition Leader, Mr John Brumby, said yesterday that the decision to award the contract to VVPS was extraordinary given that it had yet to be accredited internationally for antibiotic residue testing of animals.
Tendering Process Attacked The Age January 13, 1997

Jan 1997 The committee also divided

In a decision that divided the Tender Assessment Committee, the Government awarded the two-year $2.2 million contract to Victorian Veterinary Pathology Services and Gribbles Pathology in October.

Documents obtained by The Age under the Freedom of Information Act show that a senior Victorian Farmers Federation executive and panel member, Mr Tony St Clair, expressed reservations about the decision.
Livestock Test Unit Backed The Age January 14, 1997

Sep 2001 Gribbles buys all of VVPS

Gribbles recently announced that it has acquired the remaining 50% interest in Victorian Veterinary Pathology Services. Settlement occurred on 1st July 2001. The name of the business has subsequently changed to Gribbles Veterinary Pathology.
Preliminary Final Report. Australian Stock Exchange Company Announcements September 17, 2001

It is difficult to speculate as to what political influence Gribbles might have had and if this played any part in the process. Matheson who still owned half of Gribbles was heavily criticised in parliament. These critics linked him to the Kennett government. Trish Worth worked for Gribbles and the federal coalition government was about to be elected. She later became parliamentary secretary for health.


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Walter Cameron - the man

I have suggested that certain personality characteristics are associated with success in the health care corporate marketplace and that the system seems to select for these people. I have suggested they are not well suited for this sector.

Usually highly intelligent they tend to be supremely self-confident and have no doubts. They use their intelligence to rationalise and justify their position rather than challenge their preconceptions. They can be very persistent in this. They have a tendency to look past the views of others and ignore conflicting evidence. Most shield themselves from challenge by avoiding publicity. They surround themselves with yes men.

They are often charismatic and very persuasive in their dealings with others and are liked and admired. They can be demanding and ruthless in dealing with their staff and critics. They ridicule and attack their critics and defend their own position aggressively, often through the courts. Many come from less privileged background and have made themselves successful the hard way. Their single mindedness, drive, dedication and commitment bring them success.

In addition to the many US examples, I have suggested that some of Australia's entrepreneurs have some of these characteristics. I have invited visitors to this web site to look at Edelsten, McGoldrick, Wenkart, Catchlove, Smedley, and Bateman. All have played leading but controversial roles in the corporatisation of health care in Australia.

This would therefore be a good place to stop and look at Cameron the man. There is much that can be inferred from the accounts on this web page of his career and that of the company he built up. There are a few press reports that also give more insight into the man.

2004 Outline of career

Born: Melbourne, 1944
Married: wife Joan, and he has seven children.
Tertiary qualifications: Bachelor of Laws, Bachelor of Commerce, Master of Business Administration and Master of Letters
1970s and 1980s: Tax barrister practising in Victoria.
1987: Acquired Gribbles in a partnership with poker machine entrepreneur Bruce Mathieson.
A canny Cameron takes a new shot at Gribbles The Age July 3, 2004

2000 Childhood and education

The first Dafydd Lewis Trust scholarships were awarded for the university year of 1943, and since then 874 have been awarded. One of the recipients in 1962 was Wallace Cameron, who studied law and commerce at Melbourne University; he is now the managing director of Gribbles Pathology.

Mr Cameron was brought up by his mother and grandmother in circumstances he describes as ``rather tough''. The first in his family ever to go to university, he found the Dafydd Lewis scholarship particularly good because ``there was more mentoring involved. You had a person you could relate to and speak to.''
A Helping Hand For Bright Boys The Age November 29, 2000

2001 Impressive presenter

Medical Care Services (soon to be called Gribbles Group) boss Wallace Cameron has been on the road with analysts and fund managers, and from what we hear is impressing with his strategy.
Street Talk : Gribbles road shows Australian Financial Review May 10, 2001

2001 Publicity shy but aggressive in objectives

Similarly low-profile Wallace Cameron would not discuss his holdings in Gribbles or offer any comment on his role as a leading medical entrepreneur.

While personally shunning publicity, Bateman and Cameron have both been aggressive in their dealings with the health authorities. Both have been involved in extended legal tussles with government medical bodies often in cases initiated by the entrepreneurs themselves.
Cameron's Gribbles now faces the prospect of potentially damaging public hearings over allegations the company indirectly provided free staff as an inducement to doctors, also in the mid-1990s. Gribbles strongly denies the claims.
The Rise And Rise Of Medicare Millionaires Australian Financial Review November 20, 2001

2002 Making his own rules

Wallace Cameron is also publicity-shy when it comes to discussing his wealth and his interest in Gribbles. His stake in the pathology and medical centre company is difficult to assess. In Gribbles' 2001 financial report, under director's interests, there are no shares listed in his name. He is believed to control about 40% of Gribbles through a Netherlands company, EC Medical Investments.

Gribbles is the most aggressive of the pathology companies in Australia.
Health is wealth.
Business Review Weekly May 23, 2002

2002 He says it!

They have even been known to walk away from a deal rather than pay too much.

"Anyone who knows me knows I am a fairly mean man."

Well, he (Cameron) said it.
He's fairly mean, that Gribbles boss The Age November 22, 2002

Jul 2004 About Cameron

Notoriously publicity-shy Wallace Cameron seems to be about to reclaim the company he founded. Fleur Leyden reports.

His photo has never appeared in the annual report of the pathology company he created. He didn't turn up at last year's annual meeting because he was "ill". His enigmatic status leads to tales about his office being off limits and only accessible with a special key.

Then there was the long, unexplained absence from the company in the lead-up to his resignation.

Laying eyes on Wallace Cameron, founder and former managing director of Gribbles Group, is considered a rarity.

"We really don't know anything about Wallace Cameron," says Peter Constable, joint chief investment officer at MMC Asset Management.
Probably one of the few Australians ever to be sued by the Swiss Bank Corporation, it appears Cameron knows how to fight.
Born in Melbourne 59 years ago, Cameron resides in Brighton's Moule Avenue, one of Melbourne's swishest locales, with residents including John Ilhan of Crazy John's fame.
His car of choice is a dark green Rolls Royce, although he's not known to drive. His secretary used to drive him to work in the vehicle.

Described by one observer as a "thickset Collingwood six-footer", Cameron has a neatly trimmed grey beard, a steadfast and direct manner, and he ensured the Gribbles boardroom was decorated with St Kilda Football Club memorabilia.

St Kilda claims Cameron, a lifetime supporter and former club board member, has been a strong financial backer of the club, even before Gribbles became an official sponsor two years ago.

The club's chief executive, Brian Waldron, says Cameron regularly takes his family to the games, or he attends in his corporate box.

Waldron describes him as "warm and understanding" and "an absolute gentlemen to deal with. He's very supportive of the coach (Grant Thomas)," says Waldron.

"He's very understanding that we are trying to rebuild our business and rebrand ourselves."
Cameron's hands-on management style has won him friends and enemies.

He is described by some colleagues as a "benevolent dictator" on one hand, and a visionary on the other, particularly for his foresight in molecular biology research and his recruitment of star scientists to the company.

One close friend said Cameron accurately predicted five years out from the current consolidation in the health-care sector, that Peter Smedley's approach for Mayne, which centralised control and stripped the hospitals of any autonomy, would come unstuck.
His critics argue that at times he is "fast and loose with the numbers" - Gribbles turned its last half-year interim result from a loss to a profit, helped by its method of booking intangibles. Others say Cameron would always let a deal go by rather than pay too much.

"He lives close to the wire but always comes (out in front)," says one associate.
A canny Cameron takes a new shot at Gribbles The Age July 3, 2004

Oct 2004 Getting his own way

People who know Wallace Cameron will attest to the man's tenacity, cunning and outright determination to get his way come what may. Cameron cut his teeth in business as an expert barrister specialising in taxation issues, and if there's anyone who knows how to handle himself in a corporate brawl it's him.

So it should come as no surprise to find in the midst of a takeover bid for pathology business Gribbles, which he founded and ran till earlier this year, Cameron has launched an attempt to seize control of the board.
Cameron goes for Gribbles' jugular Australian Financial Review October 28, 2004

Nov 2004 A very private man

He (Gribbles Chairman Wheelahan) said he did not know Mr Cameron well, describing the Gribbles founder as a very private man but one who had built the company up from nothing over 17 years.
Gribbles holds last AGM AAP Bulletins November 29, 2004 

Cameron's past conduct and the continued conduct of his personal affairs are so closely intertwined with and similar to his conduct in the management of Gribbles that I have decided to divide them into areas of concern and deal with them together.

One wonders whether it is simply Cameron's personality and belief in himself and dogged obstinacy which has caused him to fight all of his battles bitterly to the last resource

Alternately is this a deliberate strategy to stress and wear down under-funded, overworked regulators unable to afford the best legal advice. If so it was very successful in avoiding convictions and avoiding costly settlements.

Several of the large health and aged care groups in the USA adopted this strategy. The companies aggressively denied, attacked, ridiculed and challenged the allegations made about them appealing adverse decisions or negotiating reduced settlements. This strategy is effective against underfunded and under resourced regulators. The large cost of a properly resourced regulatory system is never acknowledged when promoting market medicine.


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Tax problems

Cameron started his business life as a promoter of tax schemes and a tax lawyer. Many of his schemes were rather dubious and his views about their legitimacy were not shared by the tax office. As a consequence Cameron's career was characterised by recurrent and ongoing disputes and law suits against the tax office. These continued with his other businesses at least until 2004.

The complex and secretive Cameron offshore companies linked to EC Medical, from which Cameron claimed he received no income, are still (Jan 2006) being investigated by the tax office. The tax office has required Healthscope to withhold $10 million of its payment to Cameron claiming it is owned to them. Cameron has challenged this in the courts. The ramifications of EC Medical are addressed later on this web page.

The reports about Cameron's personal battles with the tax office speak for themselves.

July 2004 Tax record

Cameron practised as a tax barrister in the 1970s and '80s, and his lengthy paper trail with the Australian taxman ranges from his failure to lodge personal tax returns, to Gribbles' $4 million tax bill that led to its accounts being frozen, and the company almost wound up.
And Cameron is also credited with various tax schemes, such as a cattle leasing operation in the 1980s, which ended in the Victorian Supreme Court.
A canny Cameron takes a new shot at Gribbles The Age July 3, 2004

Oct 2003 Track record

Cameron came to the pathology business after a controversial career promoting tax and betting schemes, and providing tax advice.
Documents relating to some of these schemes and disputes have recently been seen by BRW.

A lawyer by profession, Cameron was involved with various tax schemes in the 1970s and 1980s. - - - - - - .

Throughout the 1980s and into 1990, there are numerous records of Cameron's battles with the ATO over his personal tax. The ATO served him with a bankruptcy notice in 1990, after he had failed to lodge a tax return for the years from 1980 to 1985, over which time the tax office assessed his tax bill at $1.2 million.

There are further records of court appearances relating to the failure to lodge tax returns between 1986 and 1988.

Gribbles' Victorian business had its bank accounts frozen in 1989 and narrowly averted a winding-up petition in 1990, having failed to pay the $4 million in tax that the ATO said was due. Mathieson, who increased his shareholding in Gribbles at the same time, eventually paid the tax bill.

According to investors, most of the schemes promoted by Cameron were rural. Like almost all other tax schemes, they produced better results for the promoters and managers than for the investors.

One of Cameron's schemes, which commenced in the mid-1980s and collapsed in 1989, was set up to lease cattle. Cameron marketed the scheme, which brought in about 140 people including the wealthy Melbourne investor Keith Veall.

In that scheme, investors borrowed money that they used to lease cattle. Interest and rent payments were tax-deductible and in subsequent years any progeny of the animals became the property of the investors.

But the scheme came undone. - - - - - - - . Veall and others lost more than $5 million, and in the end all they had to show for it were about 50 cows.

Veall eventually obtained a settlement from Cameron of $1.2 million, including damages, after taking action in the Supreme Court of Victoria.

The settlement did not relate to the cattle-leasing scheme, but to earlier losses incurred partly through a race-betting scheme promoted by Cameron.
Gribbles Takes A Tax Holiday Business Review Weekly October 2, 2003

Nov 2004 Recent and new tax probes

The Age has learned that the Tax Office has recently taken legal action against two of Mr Cameron's companies in relation to outstanding debts and a refusal to furnish information.

One of those companies, Cervara Fifty-One, was wound up after failing to pay a $129,776 tax debt owed to the Deputy Commissioner of Taxation.

In September, the Supreme Court declared the company insolvent and appointed Sims Partners to liquidate its assets.

Another private interest, Shandford Investments, was fined $2500 in the Magistrates Court last month on three charges of failing to furnish information requested by the Tax Office.

Asked about the investigations yesterday, Mr Cameron declined to comment.
But it is the latest probe into Mr Cameron's financial affairs that could have the most significant consequences.

It is believed that tax officials are trying to determine whether the director has received any personal income from dividends received by EC Medical Investments (ECMI).
ATO casts net beyond Gribbles The Age November 1, 2004

When Gribbles profits came under pressure Cameron brought his rather questionable tax skills into play. If one examines his past conduct and then these efforts, for which he failed to get credible independent opinion, then one can only wonder about his state of mind and his judgement.

One scheme involved shifting tax losses from one subsidiary to various related companies. In the other he redefined certain intangibles so that they would be tax exempt. Gribbles was severely embarrassed and the share price affected when their auditors rejected both schemes and refused to sign off on the accounts.

It must have been obvious to the auditors that the company was about to dissolve into a scandal in which they might be implicated. The refusal to sign should be seen as self-preservation rather than rectitude. It is more usual for accountants who make most of their money from other contracts with the company's they audit to rubber stamp large corporate accounts (Accountants for Enron, Columbia/HCA, and HealthSouth during their frauds are examples).

Oct 2003 Innovative tax schemes for Gribbles

The pathology company's controversial chief has reported a tax credit that has investors and analysts scratching their heads.
Although Gribbles says its new tax treatment has been reviewed and approved by leading tax experts, several market analysts are sceptical about the tax holiday. David Low, health-care analyst at Deutsche Bank, notes: "While Gribbles offers an attractive growth profile, we are concerned the tax office will challenge the company's claim that they are due a five-year tax holiday.
Despite the controversial nature of the tax benefit, Gribbles has not sought confirmation from the Australian Taxation Office (ATO). Lamont says: "No, we haven't raised it with the ATO. Do we expect they will look at it? Yes.
Gribbles Takes A Tax Holiday Business Review Weekly October 2, 2003

Mar 2004 Quite unique

No other company has used this method and Gribbles said it had not consulted the ATO over its provisioning.
Gribbles Suspended On Tax Doubts Australian Financial Review March 2, 2004

Mar 2004 Patient records depreciate and become tax deductible??

The crux of the new plan relates to how Gribbles treats intangible assets on its balance sheet and will effectively allow the company to pay little or no tax for the next five years.
 Gribbles has been gradually amortising the goodwill, but has moved to reclassify $159 million of intangibles specifically its patient records as intellectual property, which provides an income tax benefit from depreciation against those assets.

Gribbles acquired the patient records as part of its purchases of up to 20 smaller pathology practices.

The aggressive tactic allowed Gribbles to turn a $3.7 million tax loss in the first half of 2002-03 into a $5.2 million tax credit in the six months to December 31.
Gribbles In Grumble Over Tax Benefit Australian Financial Review March 11, 2004

Mar 2004 Transfering tax losses

Gribbles' running dispute with the ATO relates to the tax losses it claimed on the sale of an asset in 2000. The tax office is disputing Gribbles' transfer of tax losses to associated entities when it sold the Film Ezy business. The ATO re-examined the transaction and delivered Gribbles an amended assessment in January claiming $23.4 million including $7.1 million in interest and $5.9 million in penalties.

Gribbles has indicated it will vigorously contest the readjustment and has legal advice that the claim can be successfully defended although the company is now seeking a second opinion from another senior counsel.
Gribbles In Grumble Over Tax Benefit Australian Financial Review March 11, 2004

Mar 2004 Auditors reject tax schemes

However, the plan did not sit well with Gribbles' auditors Deloitte Touche Tohmatsu which last week forced Gribbles to suspend trading and restate its financial accounts with two qualifications of its tax issues. One was the intellectual property plan and the other was the $23.4 million contingent liability on its books over the ATO dispute.
Gribbles In Grumble Over Tax Benefit Australian Financial Review March 11, 2004

Aug 2005 Settles one dispute with tax office

More than $13 million was paid to the ATO to settle a dispute over the sale of the Film Ezy business in 2000. The original ATO assessment was for more than $23 million.
Gribbles mops up for takeover Australian Financial Review August 25, 2004



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Financial dealings

Cameron's financial dealings and his response to demands for money provide further insights into the man. It seems he's not very prompt in paying his debts - when he pays them.

Jul 2004 Review Fighting a foreign banl in the 1980s

Probably one of the few Australians ever to be sued by the Swiss Bank Corporation, it appears Cameron knows how to fight.

According to court documents, Cameron ran up an $8 million debt to the Swiss Bank Corporation (now UBS AG), in the late 1980s.

The bank got judgement against Cameron in Basel, Switzerland, and then took action in the Victorian Supreme Court.

Cameron appealed against a successful creditor's action by the bank, in Victoria's Supreme Court. That appeal was later dismissed, although Cameron was only required to pay a settlement sum of $1 million.
A canny Cameron takes a new shot at Gribbles The Age July 3, 2004

Nov 2004 Not paying bills

Mr Cameron is also the subject of a Supreme Court lawsuit that claims he reneged on an agreement to buy a $7.1 million Toorak property.

Court documents allege that he wrote a $710,000 cheque to cover the deposit, but there were insufficient funds to honour the payment.
ATO casts net beyond Gribbles The Age November 1, 2004

Nov 2004 Cameron and Westpac cross swords

Interests associated with Cameron organised a commercial bill facility to the tune of $9 million with the (Westpac) bank last year.

The bank now wants the money back and has put the matter in the hands of m'learned friends, who have issued proceedings.
It (the writ) names Wallace Cameron, Joan Mary Cameron, Joanne Louise Stewart and Shandford Investments, a private company of which Wallace Cameron is a director.

Westpac claimed that the $9 million facility was rolled over on July 30 and that, on August 3, Shandford was in default because it failed to cough up $42,487.47 in interest and fees.

Westpac said it issued a default notice, extended it to September 22 and that Shandford "failed, neglected and refused" to comply with the notice.

Westpac then demanded $9,198,009.90, which the bank said was not paid.
The writ noted that a business finance agreement with Shandford included mortgages over two Brighton properties and a fixed and floating charge from Shandford in its own right and also as trustee for the Cameron Investments Unit Trust.

Debt and interest guarantees were also given by the two Camerons, Stewart and a private company in its own right and in its capacity as trustee for the Joanne Mary Cameron, the Fiona Cameron, the Andrew Cameron and Alisdair Cameron discretionary trusts.

Gribbles watchers might recall that a substantial shareholding notice filed by lawyers Atanaskovic Hartnell last July - and covering an offshore Cameron-associated vehicle that owned 43 per cent of Gribbles - also mentioned Alisdair, Andrew and Fiona Cameron, the adult children of Wallace Cameron.
Westpac wants to cut Cameron clam tangle The Age November 5, 2004

If the allegations and court findings are accurate then Cameron treated Gribbles as if it were his own property without regard to his responsibilities to the board or to the market - and without any regard to governance issues. He secretly borrowed money for Gribbles from one of his other company's without telling any of his fellow directors or the market. It is alleged that he did so in order to pay the company's bills and this was done from a special cheque book.

Two motives suggested were that had the company gone to the market for the needed funds his holding would have been diluted giving him less control. If the share price fell because of financial difficulties Cameron would have been able to buy control of Gribbles for less.

Incredibly Cameron later exposed his duplicity by demanding the loan no one at Gribbles knew about be repaid and taking it to court. One wonders about the mind behind this and whether there was any sense of propriety. One is reminded of Dr McGoldrick. The judge was scathing when he ruled against Cameron.

That does not seem to have stopped Cameron from contesting the issue and my last report indicates he was still negotiating with new owner Healthscope. The outcome is not known.

An investment company part-owned by Gribbles Group director Wallace Cameron is taking legal action against a subsidiary of the pathology company, demanding the repayment of a $2.8 million loan.

It is believed that Clayton-based Shandford Investments, of which Mr Cameron is a director and shareholder, has demanded the repayment of the loan it says it made to Gribbles Pathology Victoria.

Gribbles has disputed the alleged loan and that it is due or payable. ------
Director chases Gribbles over alleged $2.8m loan The Age August 28, 2004

But in an explosive affidavit prepared for the Federal Court the Gribbles board has denied knowing of the loan at the time. Furthermore, it is understood the directors are uncertain about why such a loan was originally made.

It is believed Mr Cameron is claiming that in 2003 Shandford Investments made a $2.8 million loan to Gribbles Pathology (Vic), a subsidiary of the Gribbles group. The funds could have been used to pay creditors.
Gribbles board signs loan denial Australian Financial Review September 6, 2004

Oct 2004 Breached company law

Deposed Gribbles chief executive Wallace Cameron breached sections of corporation law and failed in his duties as a director when he arranged for a $2.8 million loan between the pathology company and a private company he controlled, a court was told yesterday.
Court hears Gribbles chief failed Australian Financial Review October 20, 2004

Oct 2004 Gribbles explains what happened

Michael Wyles, counsel acting for Gribbles Pathology (Vic), told the judge, Peter Heerey, that towards the end of 2003 the board was told the company would require more than $15 million in new capital to pay creditors and create a "working capital buffer" for the rest of the year.
It was around this time, Mr Wyles claimed, that Mr Cameron secretly organised a loan to Gribbles from his private company Shanford Investments.

Mr Wyles said Mr Cameron's motive for triggering the loan was to stop a capital raising, or at best lessen the amount to be raised, so as to ease the dilutionary impact a large placement would have had on Mr Cameron's stake in Gribbles.
The loan was used by Gribbles to pay creditors, and did not officially appear on company accounts until a finance team accountant found the chief financial officer using Mr Cameron's cheque book.

Mr Wyles said despite numerous board meetings during this time, Mr Cameron never mentioned or discussed the loan with other directors. The full details of the loan were finally unearthed by an outside consulting group invited to review Gribbles' financial state in February this year, Mr Wyles said.
CEO had secret loan, court told Australian Financial Review October 29, 2004

Nov 2004 The court order

1. The statutory demand dated 6 August 2004 is set aside.
2. The defendant pay the plaintiff's costs, including reserved costs.
18 By virtue of s 181(1) Mr Cameron was under a duty to exercise his powers and discharge his duties in good faith in the best interests of members of the Group. He stood in a fiduciary relationship to the members of the Group. Mr Cameron did not provide any evidence as to his reason for engaging in what appears to have been, prima facie, improper and deceptive conduct towards the Group and his fellow directors. Counsel for Gribbles Victoria suggested that he sought to obtain a lever by which he could drive down the share price of GGL to a level which would enable him to buy at an artificial discount the further 8 per cent which he required to take control of GGL. - - - - .
19 But whatever the reason, the reasonable inference, in the absence of any explanation from Mr Cameron, is that it was something for the benefit of himself rather than the Group. - - - .

Nov 2004 A litany of wrong doings

Deposed Gribbles chief executive Wallace Cameron engaged in improper and deceptive conduct last year when he organised a $2.8 million loan between one of his private companies and a Gribbles subsidiary, a court has ruled.
In his written ruling, Justice Heerey accused Mr Cameron, a barrister, of a litany of wrongdoings relating to a transaction between Gribbles Pathology (Victoria) and Shandford Investments.- - - - - - - .
Cameron deceptive, federal judge rules Australian Financial Review November 30, 2004

Jan 2005 Cameron still disputing issue 2 months later

But it was not the end of former tax lawyer Cameron's links with Gribbles, or of the controversy that some of the more unusual business deals put in place by the previous management are causing the new owners.

Healthscope is still disputing payment of a $2.8-million loan that Cameron says was made in 2003 by one of his private companies, Shandforth Investments, to a Gribbles subsidiary but not disclosed until 2004 to the Gribbles board. The Federal Court in November set aside Shandforth's claim to have part of the loan repaid, and Healthscope and Cameron's lawyers are continuing to negotiate.
Business Review Weekly January 27, 2005


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Disputes with Health Insurance Commission

One of the most worrying aspects of Cameron and Gribbles business practices is revealed in the allegations of kickbacks and the lengthy and bitter disputes with the Health Insurance Commission and its regulatory subsidiaries. The issue is really not so much whether Gribbles practices were illegal but whether their intent was to circumvent or find some way around the laws. The inference is that Cameron and his business partners saw nothing wrong with the common practice of rewarding people who referred work to you.

Direct or indirect payments to doctors as kickbacks for services and support are highly unethical and illegal. This results in over-servicing and often mistreatment of patients. It is also extremely profitable. Experience going back over 2000 years tells us that financial priorities do cloud judgement and impinge on duty of care. The stronger the financial pressures generated by kickbacks the greater the possible consequences for care. This is well illustrated by the US system.

Corporations in the USA have sought ways of doing this which are not illegal. That a kickback can be made legal does not of course change the adverse impact. Handling this problem is primarily a social and ethical matter - something of little concern to the entrepreneurs whose drive and self-interest ensures that they have little tolerance for ideas which impact negatively on profitability.

Corporate behaviour in Australia has followed the US pattern to a degree. Gribbles seems to be a good example. Many successful corporate executives live in the business world, are supremely confident and have no sense that they are doing anything wrong when they apply their commercial principles to health care.

It is likely that these pathology entrepreneurs are doing no more than US medical entrepreneurs did when they were accused of fraud, kickbacks and corrupting care to expand the bottom line. These people genuinely believed that what they were doing was legitimate, even desirable. They were indignant when accused and responded aggressively. I have described this sort of behaviour in the USA as "closed minded" or even "sociopathic". If there is substance to the allegations then the pattern here seems to be remarkably similar.

From the reports, which clearly do not give the whole story, it seems that Gribbles was warned or counselled and gave formal undertakings to desist. It seems that it did not do so and given Cameron's stubborn nature and subsequent disregard for proprieties this is not surprising in retrospect.

Once again Cameron fought the HIC bitterly through appeal courts challenging the jurisdiction of its various regulatory committees. The problems started soon after Cameron and Mathieson purchased Gribbles. This resulted in a Four Corner's expose and a senate inquiry in 1992.

The drawn out legal battle with the HIC followed. In March 2001 the Australian Financial Review obtained documents and published an account of the allegations and the court challenges. Gribbles denied the allegations and described the article as mischievous. For once the market was listening. Analysts were spooked and shares fell in value.

The legal struggle was still going on in December 2002, 20 months later, with Gribbles challenging and appealing at every step. If the USA is any guide then authorities gave up and reached a confidential settlement with a token payment. What is clear is that Gribbles were never convicted of any offence and can legitimately continue to deny that there was any reason for concern - and attack their critics.

May 1995 The early allegations

In 1992, when Mathieson was a director of the company, `Four Corners' alleged that Gribbles had paid large amounts in rent to medical clinics who used them for lucrative pathology testing. Mr Mathieson has since become the principal shareholder in the business.

A Senate inquiry is examining the practices of Gribbles and other pathology companies. In Parliament, Mr White said that Gribbles was still attempting to circumvent laws preventing kickbacks to medical clinics.
Poker Machine Operator's Hand Revealed Sunday Age May 28, 1995

Mar 2001 More about the allegations from the AFR

The Health Insurance Commission alleges that Gribbles Pathology worked through other companies to provide free staff to doctors at almost 170 medical centres, in direct breach of Medicare rules.

Gribbles strongly rejects the allegations - - - - .
On top of allegations about the provision of staff, Gribbles has also faced claims it offered an inflated rent to doctors for a small space near their Melbourne medical centre.

Documents revealed in a recent court case showed the pathology giant offered $160,000 annual rent for a small space in suburban Melbourne. One valuer contacted by The Australian Financial Review later estimated the space might normally be worth no more than $40,000.
In the case of Gribbles, court judgements obtained by The Australian Financial Review reveal battles with health authorities stretching back through the 1990s. On several occasions Gribbles has taken legal action to counter claims or inquiries being made by the authorities.

In a matter referred last year to a tribunal called the Medicare Participation Review Committee, Gribbles Pathology in Victoria stands accused of breaches of a number of formal undertakings made to health authorities.
In particular, a nine-page letter sent to Gribbles by the Health Insurance Commission more than 12 months ago detailed a series of claims about the company's activities in the mid-1990s, long before Medical Care Services bought into the group.

The chief allegation was that doctors at more than 100 locations were provided with free staff to collect pathology specimens, ultimately paid for by Gribbles through a company called AMMS. Within the arrangement, the collector who was often a nurse was described as an employee'' within the medical practice, although the salary was allegedly paid by AMMS.
As outlined in its December 1999 letter, the watchdog took the view that the aim of the whole scheme was to capture the majority'' of doctors' pathology referrals, to ensure that all relevant pathology work was undertaken by Gribbles, and not by its competitors''.

After considering Gribbles' responses to the letter, the HIC referred the matter to the Medicare Participation Review Committee, which ruled in January this year it had jurisdiction to hear the matter after an initial challenge by Gribbles. After that ruling, Gribbles has gone to the Federal Court, again challenging the tribunal's right to hear the matter.

The AFR understands it is Gribbles' view that there was never any association with the company called AMMS, which provided staff to doctors, and that the matter was fully settled during a previous legal fight with the HIC in the mid-1990s. A Federal Court judgement at that time shows the HIC failed to pursue the matter, after AMMS terminated its arrangements.
Ironically, details of the Melbourne rent arrangement surfaced during legal action that Gribbles had taken against the HIC. Gribbles was seeking to win approval to relocate one of its licensed collection centres in the Melbourne suburb of Rowville, and the HIC was delaying approval because of its concerns that the rent being offered for the new space was too high.
As it turned out the company lost its Federal Court fight in November last year, with a judge ruling the HIC did have the right to question Gribbles about rents.
It is not the first time Gribbles' rental arrangements have been raised in court. A Federal Court judgement from June 1999, involving a fight between two separate companies, made a number of references to rents being paid by Gribbles.

It noted that between 1994 and 1996, before specific laws on rents were introduced, Gribbles paid excessive'' rent for space in a Melbourne medical centre, at six times what was considered normal rates. According to the judgement, Gribbles was paying $60,000 a year whereas the commercial market value of the rental for the relevant space would not exceed $10 000 per annum

Notwithstanding the matter referred last year to the Medicare tribunal, Gribbles has never been found guilty of any wrongdoing in relation to rents, or any other forms of alleged inducements.
Pathology Giant Faces Kickback Allegations, Australian Financial Review March 27, 2001

Mar 2001 Gribbles response

The Company is of a view that the news article is mischievous and makes no factual allegations but instead is presented in a way to create impact without fact or substance.
Medical Care Services Ltd (MCD.AX) Response re - AFR Article - Gribbles Pathology Group. Australian Stock Exchange Company Announcements March 27, 2001

July 2001 Analysts are cautious

Without commentary from management on certain allegations made against Gribbles and published in the press, we are unable to recommend GGL with confidence for conservative investors.
On several occasions Gribbles has taken legal action to oppose inquiries by health authorities. - The article said that Gribbles Pathology in Victoria stood accused before the Medicare Participation Review Committee (MPRC) of breaches of a number of formal undertakings made to health authorities. The Committee has the power to withdraw Medicare payments.
Gribbles has also challenged the reference to the MPRC in the Federal Court.
GRIBBLES GROUP LTD (GGL) $1.01 - Smaller Companies Guide July 25, 2001

Dec 2002 Gribbles wns a round

The latest round in the dispute was in July this year, when Justice Mark Weinberg, in the Federal Court in Melbourne, ruled that the Government-appointed Medicare Participation Review Committee (MPRC) could not hear the case relating to Gribbles. The Health Insurance Commission has alleged that Gribbles had, in effect, paid the salaries of certain people who appeared to be employees in a large number of medical centres, and whose role was to take pathology specimens. The commission has alleged that the pathology collectors were employed by a company called Australian Metropolitan Medical Services, which had no revenue of its own and was financially dependent on Gribbles. Gribbles has denied the allegations.
Although the Federal Court has ruled that the committee cannot hear or determine the Gribbles matter at this stage, Weinberg said there was nothing to prevent the Government from issuing a fresh notice containing the allegations but providing "adequate particulars", that is, more details. The Health Insurance Commission is believed to be proceeding with the case and is expected to have a new notice, with further details
Gribbles Faces Testing Times Business Review Weekly (Australia) December 12, 2002

Jan 2005 Gribbles countered all claims

Through the second half of the 1990s, the Health Insurance Commission was involved in several disputes with Gribbles over possible inducements but Gribbles successfully countered any claims of improper action.
GRIBBLES SAGA NOT OVER Business Review Weekly January 27, 2005

Another issue relating to kickbacks emerged in 2002. It had to do with computer systems and payment for doing research. Many saw this as no more than kickbacks. It also locked GP's into using the company.

DEc 2002 Is cash for research a kickback?

A new arrangement that the pathology company Gribbles has with referring doctors has landed the company in controversy:
* Gribbles owns 18% of a small technology company, E-clinic, that has been trying to build a business linking pathology laboratories with referring doctors, at this stage to download results. Gribbles is its principal pathology client.
* The contentious issue is that E-clinic admits it has been paying cash to its referring doctors when they take part in market research.
* In some sectors of the medical community, the payments have been interpreted as incentives to use Gribbles services, which would be a breach of the Health Insurance Act.
* Gribbles' public affairs spokesman, Glenister Lamont, says the company has no involvement in paying money to doctors, and that E-clinic is run as a separate business.
Gribbles Faces Testing Times Business Review Weekly (Australia) December 12, 2002

It is illegal for anyone to bill Medicare for services they have not personally performed. In one of the many supreme court challenges it emerged that Gribbles was doing so. The matter was referred to the Medicare Participation Review Committee but it is likely that they had learned their weary lesson and, as happened frequently in the USA, decided not to challenge Cameron again. Possibly they did not have the financial and legal resources, or the political backing to do so.. There are no further reports.

In the USA large, well resourced corporations challenged and appealed penalties to drag out the process and push up the costs and man-hours for under-funded and understaffed regulators. They often had limited legal support. At the same time the companies publicly ridiculed the claims and lobbied the politicians who were recipients of corporate campaign donations. They were the people who appointed and fired the regulators. It was very effective in discouraging regulators. We have no information to suggest anything like this happened here.

Oct 2002 Out-sourcing and bills

The Australian Health Insurance Commission (HIC) is involved in a legal battle with Gribbles Pathology. The case involves Gribbles' alleged outsourcing of pathology services to other companies, thereby invalidating Medicare payments. The question at hand involves whether the issuing of accounts and collection of fees was done by Gribbles or its partner companies. The Federal Court's Justice Weinberg has referred the case to the Medicare Participation Review Committee.
Outsourcing pathology services. October 30, 2002


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The Balance Sheet

The marketplace initially welcomed the positive projections made by Gribbles. The strong political support helped. When promised profits were not achieved the information supplied to the market and the accuracy of balance sheets was questioned - particularly when the trends conflicted with the company's assertions.

Nov 2002 Intangible assets

But back to the balance sheet which, on closer inspection, shows that Gribbles boasts $323 million in intangible assets, including brands and licences. The bottom line of the balance sheet shows that net shareholder equity is actually only $293 million.
He's fairly mean, that Gribbles boss The Age November 22, 2002

May 2004 Inadequate disclosure

Gribbles, with about 14% of the market, is Australia's third-largest private pathology provider. Since late 2003, the company has been criticised by analysts and large inves-tors for its inadequate disclosure, failing to live up to the earnings guidance it has provided investors, and for the patchy results from its acquisitions program.
In 1998 and 1999, tax losses from a Gribbles subsidiary, Film Ezy, were transferred to other entities in the group. When Film Ezy was sold in 2000, Cameron provided the buyers with indemnities relating to future claims. These indemnities were not mentioned as a contingent liability in accounts until 2003, prompting analysts to wonder whether more nasty surprises are to come. A Gribbles spokesman would not comment.
The Temperature Is Rising Business Review Weekly May 13, 2004


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EC Medical

One of the more interesting insights into the mind and practices of Cameron is provided by the EC Medical affair. When Gribbles was back door listed through MCS in 2001 Cameron's 41% ownership was vested in an Irish company Suncall Investments which he controlled. At some subsequent time this investment was through EC Medical which was listed as the major shareholder.

Cameron claimed that he was not the owner of the shares, nor did he benefit from them. He merely spoke for them. He failed to declare an interest to the stock exchange or in the company's annual reports. He resisted any attempt to find out who owned the shares and it was generally assumed that he did.

As I understand it, it is not acceptable for a public company to have large secret shareholders. They are required to disclose who the major shareholders are. Neither the board, its governance structures nor ASIC, the regulator made any attempt to force Cameron to disclose.

The matter became an issue in 2004 when Cameron was ousted as CEO and the new chairman put the company up for sale. Buyers would not bid for a company when they did not know whom they were really dealing with.

A search commissioned by the company reached a dead end. The matter was referred to regulators and steps were taken to confiscate the shares if Cameron did not disclose who he was acting for. Cameron then reluctantly disclosed.

EC Medical turned out to be the front organisation for a complex paper trail of foreign companies and banks, some registered in tax havens. The ultimate owners were Cameron's children. In the last annual report Cameron acknowledged an interest. Presumably this complex paper trail was another of Cameron's tax avoidance schemes. That Cameron was financially stretched was confirmed when it was revealed that the EC Medical stake was mortgaged to ANZ Nominees.

Cameron's claim to no interest in EC Medical must be set against his $8 million purchase of a house in Australia and of properties in London after the EC Medical complex sold its shares to Healthscope for $120 million.

Typically the sale to Healthscope was a complex process mediated through other companies - presumably once again intended to minimise tax.

In 2006 the EC Medical affair is still being investigated by ASIC and the tax office.

Jun 2001 The merger arrangements

FIRB approval was necessary because Dublin-registered Suncall Investments, controlled by Gribbles managing director Wallace Cameron, will emerge with about 41 per cent of the enlarged MCS.
MCS $192m Swoop On Gribbles Approved The West Australian June 28, 2001

Jul 2004 Review - Lttle contact sith EC Medcal

Medical Care Services secretary Harley Whitcombe told the AFR his only contact with EC Medical Investments was via its corporate adviser from accounting firm Arthur Andersen.
Clues to the identity of Gribbles stake holder Australian Financial Review July 15, 2004

Oct 2003 Cameron holding concealed

Until now, most brokers and fund managers believe that Cameron has a substantial ownership stake in the business, Cameron's holding in the company has not been acknowledged. In the 2002 annual report, under directors' interests, his only stake listed is 1.3 million options.

His main holding seems to be through a Netherlands-based company EC Medical Investments, but this is not listed under directors' interests.
Gribbles Takes A Tax Holiday Business Review Weekly October 2, 2003

Jul 2004 Threatening to confiscate EC Medical shares

The companies watchdog is pushing to gain control of a secretly owned 43.1 per cent stake in biomedical company The Gribbles Group - unless the elusive owner comes forward.

In a statement released yesterday, the Australian Securities and Investments Commission said that it had approached the Federal Government-sponsored Takeovers Panel after concerns were raised about the ownership of the stake, which is held under the name EC Medical Investments.

ASIC said that its application was based on "alleged contraventions of the tracing and substantial holding provisions" of the law. It has asked to take control of the 43.1 per cent parcel "in the event that the ultimate owners of that parcel are not disclosed to the market".

"ASIC is concerned about the lack of disclosure of the ultimate owners of a controlling stake in a listed company," ASIC said.
A spokesman for Gribbles said the company could not comment because it was bound by confidentiality. But it had commissioned law firm Minter Ellison to conduct an international search to identify the owners of the stock. The investigation has been under way for two months.
ASIC acts to solve Gribbles mystery The Age July 10, 2004

Jul 2006 "A furtive imposter"

T'would be a rare occurrence indeed for a major shareholder to spend $60 million accumulating a controlling stake in a company and then not take management's calls. Not reveal its identity, not even respond to legal notices.

Perhaps another strategic review is in order. Might another capital raising, shortly followed by an earnings downgrade, do the trick and unveil the identity of this furtive impostor?
Margin Call - Case of the mysterious shares The Australian July 14, 2004

Jul 2004 Cameron forced to disclose

GRIBBLES founder and recently dumped chief executive Wallace Cameron yesterday finally outed his three adult children -- and arguably himself -- as the holders of a 43 per cent stake in the pathology group.
But if the corporate regulator judges he has breached corporations law in not previously disclosing his interest, Mr Cameron could face a fine of $2750 and a six month stint in jail.

Faced with the prospect of the Australian Securities & Investments Commission seizing control of the stake, Mr Cameron yesterday revealed that Belgium-based holding company EC Medical Investments -- through entities based in The Netherlands, Dutch Antilles and Channel Islands -- was actually three separate trusts, the beneficiaries of which were his children and some unspecified public charities.

Investec Trustees (Jersey) -- an arm of the South African investment bank that also operates in Australia -- acts as the overall trustee.

All three Cameron children are lawyers. Alisdair, a corporate lawyer, lives in Sydney, as does his brother Andrew, who specialises in Aboriginal rights. Daughter Fiona Ricklow lives in London.
Gribbles owners revealed The Australian July 17, 2004

Jul 2004 Cameron incrminates himself??

But he might have also outed himself, with lawyers acting for EC Medical Investments arguing that Mr Cameron could be viewed as acting in concert with his children and therefore considered a substantial shareholder in Gribbles as well. Mr Cameron has not filed a director's interest statement to the Australian Stock Exchange.
Decision day on Gribbles Australian Financial Review July 20, 2004

Jul 2004 ASIC investigates

The corporate regulator (ASIC) today kicked off its own investigation into the affairs of listed pathology group Gribbles Group Ltd.

At the same time, the Australian Securities and Investments Commission (ASIC) called off the probe by the Takeovers Panel.
ASIC launches own investigation into Gribbles affairs Australian Associated Press Financial News Wire July 20, 2004

Jul 2004 The story and the issues set out

Things began to come to a head a couple of months after Cameron departed as chief executive (although remaining a director) and the company received some informal approaches, with speculation that Cameron may have been involved in one of those.

Gribbles began sending out tracing notices, under section 672 of the Corporations Act, to discover the ownership of ECMI and was led a merry dance. ECMI is incorporated in Brussels, Belgium.Notices were sent requesting the name and addresses of any parties with a relevant interest, the nature and extent of the interest, and the circumstances that gave rise to the interest.

That led to two companies in The Netherlands -- Palagiano and Pianoro. From there the trail went to Jelsker Corp in The Netherlands Antilles and finally to Investec Trustees (Jersey) in the Channel Islands, and the mention of three trusts, Scotsman, Reconciliation and St Catherine's.

Then Gribbles hit a brick wall, so it turned to the Australian Securities & Investments Commission for help. ASIC asked the Takeovers Panel to vest the 43 per cent stake with the commission, which would sell the shares and give the proceeds to the registered holder -- in this case ANZ Nominees -- to be distributed to the beneficial owners. The 43per cent stake would be sold in non-control parcels, 5 per cent or less.
The disclosures satisfied the panel, but not ASIC. It has now initiated a formal investigation -- under which it can obtain evidence on oath -- into the adequacy of the disclosure notices. Perhaps the most interested observer in the outcome could be the tax office.

Cameron's children were not shown as having a relevant interest in the 43 per cent so, on the face of it, they also have no power to direct the trustee. If so, Investec would have the sole power to make decisions in relation to the 43 per cent shareholding, and the Cameron family would have left itself with no ability to assert control over an asset worth at least $85 million. ASIC may well find that difficult to accept.

The admission by the Investec companies of a relevant interest in the 43 per cent stake indicates a long-standing contravention by that bank, which should be well aware of its legal obligations. Cameron may also have contravened the substantial-shareholding and director's interest requirements, but he argues that it is on a technical interpretation and that he acted on legal advice.
Disclosure rules need a shake-up The Australian July 22, 2004

Sep 2004 Annual report lists Cameron's interest for first time

The deposed chief executive of Gribbles, Wallace Cameron, has finally told shareholders what the market had suspected for months; he controls 194.5 million shares in the pathology group through a European trust, EC Medical Investments.

The admission was buried on page 25 of Gribbles' annual report, released late last night, and was the first time Mr Cameron had included a directors' interest statement to shareholders.
Cameron admits Gribbles link Australian Financial Review September 30, 2004

Oct 2004 The tax office investigates

The Tax Office investigation is believed to relate to whether Mr Cameron received any personal income from an estimated $10 million worth of dividends paid by Gribbles to ECMI between 2002 and June this year, the sources told The Age.
Tax probe of Cameron trust dividends The Sydney Morning Herald October 29, 2004

Nov 2004 ECMI shareholding is encumbered

Yesterday's higher bid also confirmed what the market suspected: that the ECMI shareholding was encumbered. ECMI is the beneficial owner, but the registered holder is ANZ Nominees. ECMI said yesterday that ANZ Nominees and ANZ Bank, as holder of an equitable mortgage over the shares, had given their consent to the transactions with Healthscope. It's thought the equitable mortgage relates to margin lending. That adds weight to market talk that Cameron was under financial pressures to conclude a deal.
Looks like a healthy rivalry is narrowed down to two The Australian November 4, 2004

The transaction between EC Medical and Healthscope was once again pure Cameron - complex and indirect presumably because of tax issues.

The tax office had dealt with Cameron on multiple previous occasions. They ordered Healthscope to hold on to $10 million that they claimed Cameron owed to the tax office. Cameron responded by suing the ATO and Healthscope for the money.

Nove 2004 Complex payment to Healthscope

Just as the market has come to expect from EC Medical Investments (ECMI) and its representative, Gribbles director Wallace Cameron, the transaction was anything but straightforward.

ECMI, which had previously agreed to sell its remaining 150 million shares in the company to Healthscope by November 17, has instead sold its shares on to five other parties that have apparently agreed to accept Healthscope's 63 ¢ a share offer.
The trust's announcement to the Australian Stock Exchange late yesterday did not say where, when or at what price the transaction between ECMI and the other five parties occurred - or why ECMI did not pass its holding to the bidder directly.

The respective boards and advisers of Gribbles and Healthscope are believed to be baffled at Mr Cameron's latest manoeuvre. And ANZ , which had a mortgage over the holding and a role in acquiring the new holders' acceptance of Healthscope's bid, was also unable to shed light on the matter. Mr Cameron, who is holidaying overseas, wasn't available either.
String of sales ends at Healthscope The Age November 19, 2004 

Apr 2005 Cameron demands Tax offce and Healthscope pay him $10 million

Companies linked to Gribbles Group's founder Wallace Cameron are trying to claw back $10 million that has been retained by the pathology group's new owner HealthScope under orders from the Australian Tax Office.

The companies have launched Federal Court action against the Tax Office, HealthScope and ANZ Nominees, which was a custodian for the Wallace family trust, EC Medical Investments.

The Tax Office recently lost a bid to have the case dismissed.
Less than a week later (after the sale) the Tax Office sent a letter to HealthScope demanding it hang on to $9.95 million of the proceeds, which it claimed ECMI owed in capital gains tax.
The companies argue that the Tax Office's demand should be declared invalid because at the time they accepted HealthScope's offer, ECMI was not the owner of the shares and not a beneficiary of the sale proceeds.

ECMI was issued a tax notice on December 1, demanding it repay $9.9 million within 12 months.
Gribbles trust sues over $10m tax clip The Sydney Morning Herald April 4, 2005



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Data Sharing - Medical Records

By this time you may be wondering about the sort of people providing medical services. Well what about your personal medical records. Would you be happy for Cameron and Gribbles to have responsibility for de-identifying your records and then selling the records on to commercial enterprises?

Corporate interests glibly talk about de-identifying medical records. These are unique pieces of data and there would be occasions when the identity of individuals would be only too obvious even when all personal identifiers were removed.

Medical records are valuable sources of information for monitoring standards and managing services but the prospect of their falling into the hands of commercial or political interests is disturbing.

One of the revelations from Gribbles collapse was that Gribbles was secretly accumulating confidential patient information and were planning to de-identify it and then sell it to other commercial interests.

They were buying these medical records from the doctors who supported them - something that might have been no more than another way of paying kickbacks to those who supported them. You will recall that Gribbles was alleged to have used a third party in previous kickback claims. The commercial value of these records was questioned by some.

As disturbing was that Healthscope, a hospital operator saw nothing wrong with this and planned to continue.

Perhaps it was the outcry that caused the project to be abandoned - or more likely that the HIC had something to say about it.

Nov 2004 Buying and sellng de-identified data

HEALTHSCOPE has defended the status of a data-sharing practice run by its $284 million takeover target, Gribbles Group, which some analysts have questioned and suggested could attract scrutiny by regulators.

The business involves paying doctors for medical records -- from which the patient's identity has been removed -- relating to pathology and, possibly, their prescribing habits.

It is Gribbles' intention to on-sell the information to pharmaceutical companies, who use the information to look for medical trends, such as what drugs are being prescribed and for what conditions. But stock market investors are confused as to the purpose of the project, given that much of this sort of information is readily available. In a recent report Citigroup noted the practice, which has been going on for a year or more but was only revealed due to the takeover by Healthscope.

The report questioned why a company with a quality board and management intended "to continue a project which transacts with doctors for data but has revenue implications -- and may attract further scrutiny".

Healthscope managing director Bruce Dixon dismissed so-called rumour and allegations that the practice was a cover-up for kick-backs to GPs. "We've made sure it passes any smell test -- we're a very straight up and down company," he said.
When approached about the matter Gribbles refused to comment. Mr Dixon said the real issue to be determined by Healthscope when it took full control of Gribbles was if the business was, in fact, viable.

He said the information was in big demand in the US, but he was unsure if the volumes could be justified in Australia.

This comment is at odds with Citigroup's claims that Healthscope had said previously that scrapping the business could have revenue implications.
No quibbles with data-sharing The Australian November 24, 2004

Nov 2004 A third party involved

Gribbles chief executive Andre Carstens said concerns over the propriety of the company's exploratory business to onsell patient data to pharmaceutical companies had been misplaced. He said the business, revealed in the takeover process, bought patient data -- with the identity removed -- from a third-party provider, not directly from doctors.
Gribbles chairman talks up takeover The Australian November 30, 2004

Jan 2005 Heaslthscopes only interest is commercial

Healthscope is also facing tough questions over an arrangement between Gribbles and referring doctors, in which the company has been paying them for "patient data". The unusual deal came to light as part of the financial analysis of the takeover bid. The explanation given was that in the previous 12-15 months, Gribbles was buying the data from doctors with a view to eventually selling it to, for example, pharmaceutical companies that might be interested in learning about doctors' prescribing practices.

The arrangement was in place in 2003-04 and appears to have cost the company just over $5 million. That year, Gribbles capitalised $5 million research and development expenditure related to the cost of developing this potential line of business.
Queried about the patient data arrangement, Healthscope's managing director, Bruce Dixon, says it is being reviewed. So far, none of the data collected has been sold. "Ultimately, it comes down to whether we can sell the data, how commercial the data is," he says.

The Health Insurance Commission would not comment on whether the deal was under review, but it is hard to imagine the regulator is not putting it under the microscope.
GRIBBLES SAGA NOT OVER Business Review Weekly January 27, 2005

Aug 2005 Healthscope abandons this business

A competitor, thought to be Mayne Group, has taken on the staff and marketing employees of the scheme.

This resulted in Healthscope effectively exiting the business, the nature and ethics of which was questioned by some market observers when Gribbles was acquired.
Healthy hint on scope to acquire The Australian August 18, 2005


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Other Issues

Gribbles were accused of aggressive dealings with staff and the unions. Like other health care companies it offered staff incentives and gave its CEO Cameron options when the company was not performing.

Aug 2001 Pay dispute with staff

She says GRIBBLES - Victoria's largest pathology service - offered staff company shares instead of a pay rise, reneged on an 11 per cent pay rise and then backed out of talks at the Australian Industrial Relations Commission.
Vic - Pathologists strike in latest industrial dispute. Australian Associated Press August 23, 2001

Aug 2001 Staff on strike

More than 400 medical scientists, pathology collectors, couriers and clerical staff from Gribbles Pathology walked off the job indefinitely this morning after the company refused to continue enterprise bargaining negotiations.
Vic - Tempers flare as pathology workers picket Gribbles. Australian Associated Press August 24, 2001

Sep 2004 Shares and options for employees

The Gribbles Group Ltd applied on September 3, 2004 for the quotation of 500,000 ordinary shares issued under an employment contract. There are 452,326,392 ordinary shares quoted. There are 16,268,334 options unquoted.
GRIBBLES GROUP QUOTES EMPLOYEE SHARES Australian Company News Bites September 3, 2004

Sep 2004 Cameron gets options as profits fall

The 2003-04 report also revealed that Mr Cameron received 3.3 million options during the year, despite Gribbles posting a $51.3 million net loss for the year to June 30 after it was forced to write down business investments and to settle a tax dispute with the federal government.
Cameron admits Gribbles link Australian Financial Review September 30, 2004


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Cameron's profit

EC Medical was mortgaged to ANZ bank and it is not reported how much of the $120 million paid by Healthscope went to pay this off, whether the listed owners, Cameron's children got the money, or how much went to Cameron himself.

He was soon spending up on property in Australia and the UK. It is unlikely that he will put himself out to pasture. It is not in the nature of people like this.

Apr 2005 $8 million for estate

The mystery buyer of lavish Mt Macedon estate Sefton, auctioned on Thursday, is understood to be Wallace Cameron, founder and former chief executive of pathology company Gribbles Group.

Sources tell Keyhole that Cameron paid a staggering $8.175 million for the property, smashing the previous Mt Macedon residential record of $3.25 million. It is believed the estate will be used for private purposes, not commercial.
$8m Sefton mansion `bought by ex-Gribbles chief Cameron' Sunday Herald Sun April 24, 2005

May 2005 $25 million on UK property -- eyeing pathology in UK

It seems former Gribbles controller *Wallace Cameron* is spreading his wings into the UK market.

Fresh from spending $8 million-plus on the historic Sefton property in Mt Macedon near Melbourne, the aforementioned Wally has spent circa $25 million picking up a couple of big properties around London.

Better still, he is reported to be looking for a pathology business in the UK. Cameron's former pathology company, Gribbles, was acquired by

Healthscope last year.
It's a hard slog dealing in Asia Australian Financial Review May 17, 2005


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And What about Probity

An interesting issue not mentioned in any of the hundreds of Gribbles press reports I looked at is the issue of probity and licenses.

Background:- Probity has been a key concept in the licensing of health care corporations. As corporatisation has progressed the enforcement of probity requirements in the allocation of health care licenses have been sidelined. As a consequence even corporations with criminal records (eg Mayne Nickless) have been granted licenses and allowed to continue operations. When objections were lodged the issue was ducked by ignoring or rationalising.

Probity in health care means much more than not having a criminal conviction. It means that the applicant is a suitable person and sufficiently trustworthy and socially conscious to be entrusted with responsibility for vulnerable citizens when they are ill. Responsibility for vulnerable citizens took precedence over individual's rights to exploit the marketplace. It was a privilege granted to reputable and trusted citizens to be allowed to serve their fellows in their time of need. Today this seems a rather old fashioned idea but it is rooted in another idea, that of a caring society, one that values those who care.

With the pressures of corporatisation and the arrival of unsuitable multinationals on our shores, the difficuly in enforcing probity provisions increased markedly. No government has attempted to revise our laws in order to give regulators the teeth needed to enforce these provisions.

When NSW Health Department attempted to enforce their probity clause in 1993 the government appointed a judge at risk of improper influence to grant one of the most unsuitable companies in the world a license over the department's objections.

Only Victoria has had the legislative resources to act and they did so in the case of the US companies Tenet Healthcare in 1994 and Sun Healthcare in 1998. More recently - since 2003 - in the case of HealthSouth they have sat on their hands in spite of an admitted US $4 billion fraud.

In 1993 the West Australian Health department admitted that they did not have the powers to remove licenses from Tenet/NME. They asked their minister to make the regulatory changes needed to enable them to do so and to initiate a process to revise laws in all states and federally to address the emerging problems. Nothing has been done.

Federal licensing authorities have made no attempt to address the issue of probity. The Health Department licenses aged care and pathology laboratories. In 1994 I received a fax from the aged care licensing authority boasting of their probity provisions and the rigour with which they were enforced. In 1996 the new coalition government revised these licensing laws removing the probity requirement, but in subsequent correspondence they claimed to consider probity an important issue.

I would be interested to know if any licenses have ever been rejected on this basis. Instead they have relied entirely on accreditation processes. These are like shutting the stable door after the horse has bolted. They have been relatively ineffective elsewhere.

In fairness the HIC has tried to use its licensing powers to limit kickbacks in pathology by refusing licenses for collection centres paying excessive rentals to GP's

During 1998 and 1999 large volumes of information were sent to the federal authority licensing nursing homes regarding Sun Healthcare with requests for acknowledgment. This only occurred after the president of the AMA took up the issue with the minister. Sun Healthcare planned to enter this sector.

Sun Healthcare also purchased pathology laboratories in 1998 and no question was raised about its licenses. When more information was acquired about Sun a formal objection was made to the pathology licensing authority. It was referred to a subcommittee which took no action and never responded to queries.

Probity and Gribbles:- As I have indicated probity and legality are two separate issues. Being a fit and proper citizen is more than not being a criminal. One can ask whether the combination of a tax lawyer well known for his tax schemes and legal battles with the tax office and a gambling entrepreneur were fit and proper people within the health care context in 1987. One should also ask what the views were about the company and its manager's subsequent conduct and whether this was fit and proper in the health care context.

One should not blame the licensing authorities for not acting. It is extremely difficult to proceed in the face of negative political and establishment views of any action. Acting without legal backing and in a situation where government departments are politicised and not truly independent is hazardous for the careers of government officers.

In spite of these limitations probity issues have been a major frustration for governments in the implementation of their program to corporatise health care. They have been embarrassed into action by the pressures developed. Their plans to utilise Tenet/NME, Columbia/HCA and Sun Healthcare to implement their political program were effectively stopped. Their reluctance to give probity regulations teeth is not unexpected.

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This page created January 2006 by
Michael Wynne