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December 27, 2007 |
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GOODWILL GROUP: JCR Cuts Rating on Senior Debts to BB Japan Credit Rating Agency Ltd. has downgraded its rating on senior debts of The Goodwill Group, Inc. from BB+ to BB, placing it under Credit Monitor with Negative direction. Goodwill is a pure holding company of Goodwill Group. Its subsidiary Goodwill Inc. announced on December 22, 2007 that it was notified by the Health, Labor and Welfare Ministry's Tokyo bureau that it would have a chance for explanations on a suspension order and a business improvement order with respect to the worker dispatch business. The bureau will issue an order in January 2008 to suspend the worker dispatch business for all of the business establishments of Goodwill (totaling 737) for two months and for four months for 89 establishments, which were recognized to have violated the Worker Dispatch Law (suspensions of concluding new dispatch contracts and renewal of contracts). Although other companies of the group are not subject to the sanction, issue of business suspension order to Goodwill Inc. will have impact on other temporary staffing businesses to a degree. Thus, JCR deems it necessary to examine carefully direct and indirect impact of the suspension on the operating performance of the entire group. Goodwill Group, Inc.'s confidence in society has lowered further than before as significant defects in compliance for the core temporary staffing and subcontracting of labor business following those for nursing care business came to light now. The Company has set out a plan to strengthen compliance. However, it will be difficult for the Company to ensure effectiveness of the enhancement in the short run. For the above reasons, JCR downgraded its rating on the Company and placed it under Credit Monitor with Negative direction to it. About Goodwill Group Japan-based The Goodwill Group, Inc. -- http://www.goodwill.com/gwg/english/index.html -- is a involved in five business segments. The Staffing segment offers recruitment services for technicians, senior workers and others. The Human Resources-related segment provides employee-hiring support services to corporate clients, counseling services to workers and outplacement services to retired and retiring workers. The Nursing-care and Medical Support segment is engaged in the provision of home-care services, care services in facilities and dental examination services at home, as well as the sale of nursing-care goods and equipment, among others. The Senior Residence and Restaurant segment operates nursing home under the name THE BARRINGTON HOUSE, and also operates restaurant in both domestic and overseas markets. The Others segment is engaged in the planning, designing and management of pet care facilities, the operation of pet care shops, the operation and management of nurseries, the provision of baby- sitting services and others. The Troubled Company Reporter-Asia Pacific reported on June 14, 2007, that The Goodwill Group is thinking of selling its home nursing-care services division after the Japanese government banned it from renewing its licenses due to its involvement in a fraud scandal. The article conveyed that the firm allegedly obtained some of the licenses for nursing-care service operators certified under a public insurance program through fraudulent applications, including those with an inflated number of employees. |
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