A Crown corporation at the heart of a scandal in France

The Canada Pension Plan Investment Board (CPPIB), the main shareholder of the French group Orpéa, lost hundreds of millions of dollars in one week due to the group’s stock market crash, which is in the midst of of a scandal across the Atlantic.

© Yves Herman/Archyde.com
A resident of the residence for the elderly Le Cinquantenaire, belonging to Orpéa, in Brussels.

Orpéa, the world leader in seniors’ residences and private clinics, has gone public since the revelations of a journalist in his book The Gravediggers. This river investigation accuses the company of mistreatment of the elderly, among others.

It was in 2013 that CPPIB, a Crown corporation that invests money from the Canada Pension Plan fund to obtain the best performance possible “, became the main shareholder of the Orpéa group, up to 15%.

The CPPIB invests in particular in shares of companies, one can read on its Internet site.

The Office’s initial investment in Orpéa was 320 million euros (more than 450 million current dollars). But since the release of the journalistic investigation targeting Orpéa, its investment has lost more than 600 million Canadian dollars in one week.

A series of revelations

The independent journalist Victor Castanet looked for three years at what is happening in the seniors’ residences of the giant Orpéa, which has more than 1,200 establishments in Europe and Latin America. In his book, the journalist denounces a race for profitability carried out on the backs of the elderly and says he observes several breaches of the law, in particular the embezzlement of public money.

He multiplies the testimonies, such as that of Saïda, a life assistant, who had to ration the number of diapers she gave each day in the establishment of the group for which she worked. It was three a day maximum. And not one more. It doesn’t matter that the resident is sick, that he has gastro, that there is an epidemic. nobody wanted to know “, can we read in the survey.

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In his book, he also describes a patient covered in bruises, others who lost 20 kilos in less than three months. All this in a residence whose month costs between 6,500 and 12,000 euros per month (between $9,000 and $17,000).

The Orpéa group refused to answer the journalist’s questions. He calls his accusations false, offensive and harmful and seized his lawyers.

CPPIB remains silent

Despite the significant losses incurred following the revelations, the CPPIB, operated by RPC Investments (Canada Pension Plan), does not wish to react publicly for the moment.

In the charter of Investissements RPC, it is written: We always meet and exceed the rigorous ethical standards that the 20 million contributors and beneficiaries of the CPP and the CPP itself expect of our organization. »

Ottawa s’abstient

As of September, CPP Investments managed over $540 billion in assets and posted a 10-year annualized net return of over 11%.

Because the fund helps secure Canadians’ pensions through its investments, it says it makes accountable to Parliament and to federal and provincial ministers of finance, who are the managers of the Canada Pension Plan ».

But the Federal Ministry of Finance does not wish to react to the consequences of the fall of Orpéa on the CPPIB. By e-mail, Finance Canada believes that since the board is independent of government, it is best placed to comment on its work, including specific investments. »

With the collaboration of Gérald Fillion