ABC Learning boss pleads not guilty

FORMER childcare mogul Martin Vincent Kemp has pleaded not guilty to dishonestly exercising his powers to personally gain more than $3 million from ABC Learning Centres to pay his debts.

Kemp, who was executive director of ABC Learning Centres' Australia and New Zealand arm, is accused of arranging for ABC to buy three childcare centres and freehold land he controlled between January 9 and 12, 2008.

He allegedly failed to disclose the conflict of interest and did not act in good faith in the best interests of the company.

Commonwealth prosecutor Alan Macsporran told Brisbane District Court on Monday the Crown would prove the Corporations Act breaches were "deliberate" with the "intention of obtaining a benefit for himself".

"The transaction he carried out was intended by him to result in the payment to his companies that controlled these centres of deposits on the sale which amounted to 75% of the purchase price ($3,082,500)," he said.

"That the deposit ... would be released to him immediately before the transaction settled and he, significantly, at a time before the board of directors of ABC were aware of this transaction.

"Because they weren't aware of it they had no opportunity to assess the transaction on its merits

"These items should have had board approval before they were processed.

"They were his centres and he didn't disclose them to the board.

"He sold them to the company and on the day that was done he obtained the money. He spent it almost immediately.

"He transferred it the same day to a bank account controlled by himself and his wife and then paid out to satisfy some debts he had accumulated through margin lending."

Mr Macsporran said the next board meeting fell on February 1 and Kemp allegedly failed to tell board members about the transaction, his conflict of interest or the large deposit he had spent.

He said ABC usually offered only a $10,000 deposit because it was acquiring so many properties, it could not "fork out" more before settlement.

Mr Macsporran said the Crown would also take the jury to an email Kemp sent to Eddie Groves, who ran the acquisitions arm of ABC, in November, 2011.

"I'm going to put my three childcare centres at Hamilton, Boronia Heights and Beenleigh on the market. None of these would suit ABC," Mr Macsporran said Kemp had written.

"The Crown case is that what Mr Kemp said in that email was correct that (they) ... were not suitable for ABC and yet they're the ones he ultimately sold to ABC in January, 2008."

The trial is expected to go for four to five weeks.

Among the witnesses are former federal minister Lawrence Anthony and former Brisbane lord mayor Sallyanne Atkinson who played roles in the ABC suite of companies.

The trial continues.

Ignore ABC rumours: judge

Judge Terry Martin warned the jury to ignore any rumours circulating about the collapse of ABC Learning Centres as they assess whether a director acted dishonestly.

He told the jury to ignore publicity about ABC's collapse, alleged conduct about its directors and other people involved.

"This case is trial by jury not trial by media, gossip or rumour," he said.

"You are the persons out of the community with the obligation and duty to return verdicts in this trial."

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