PARIS (Reuters) – Orpea and Korian fell on the Paris Stock Exchange on Friday after the announcement of an ongoing investigation by the France 2 magazine “Cash Investigation” into practices within private nursing homes, which adds to the recent publication of a book-investigation revealing serious dysfunctions in the sector of retirement homes.
At 1:58 p.m., Orpea lost 12.88% to 33.54 euros, the lowest since May 2013.
The title of the operator of retirement homes has fallen by nearly 60% since the publication on January 24 of the first extracts from the investigative book “Les Fossoyeurs”, in which the journalist Victor Castanet denounces the negligence of Orpea and the bad treatment of elderly people in certain establishments of the group.
The competitor Korian unscrews this Friday from 21.26% to 16.63 euros, also at the lowest since 2013.
“Cash Investigation”, a France Télévisions magazine which offers investigations into abusive practices in the business world, will broadcast an issue devoted to nursing homes next March after more than a year of investigation.
Journalist Elise Lucet, who presents the show, promised “new revelations” on her Twitter account.
Korian announced in a press release that the general manager, Sophie Boissard, was ready to respond to the request for an interview with the journalist from France 2 “provided that it is a fair discussion, without her remarks not be betrayed, mounted and therefore deformed”.
Orpea declined to comment.
“The announcement of a Cash Investigation after a year and a half of investigation does not help investors to regain confidence in this type of value. Investors can no longer hold this type of company in their portfolios, given the bad news that is likely to fall,” said Mikaël Jacoby, head of trading at Oddo.
“There is a loss of confidence linked to the book on Orpea which set fire to the powder (…) and to the investigations requested by the government on the group and by extension to all the managers of Ehpad, which goes a priori change the ‘business model’ or the way in which the business of these companies was conducted,” he continued.
After the questioning of Orpea, the government announced the launch of a double investigation, administrative and financial, targeting the group whose general manager has since been dismissed.
Orpea has announced the creation of an assessment mission by two independent firms on the accusations against it.
(Laetitia Volga with Valentine Baldassari, edited by Blandine Hénault)