New media report says potential financial irregularities occurred at Orpea's Swiss unit

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FILE PHOTO - A view shows the logo of French care homes company Orpea at the entrance of a retirement home (EHPAD - Housing Establishment for Dependant Elderly People) in Reze near Nantes, France, February 2, 2022. REUTERS/Stephane Mahe

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PARIS, May 19 (Reuters) - France Info radio said on Thursday there was evidence pointing to potential financial irregularities linked to a Swiss unit of French care home operator Orpea (ORP.PA).

An Orpea spokeswoman told Reuters the France Info report was linked to details of a wider criminal investigation into the scandal at the company in France, adding it was up to the judicial authorities to determine whether or not unlawful acts had been committed.

France Info said it had found evidence suggesting Orpea's Swiss unit Kauforg, which until 2020 bundled purchasing food and other supplies for the company's French care homes, could have excessively invoiced suppliers for services such as "product performance" or "product development".

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Kauforg was also paying high salaries to executives who at the same time were also on Orpea's French payroll, according to the France Info report.

France Info quoted Orpea's recently appointed chief executive, Philippe Charrier, as saying the company saw it as its duty to investigate all accusations made against it.

"Several information channels have enabled us to detect potentially unlawful acts, questioning the behaviour of some individuals," Charrier told France Info.

It was unclear if his comments were made in reference to the report about the Swiss unit or to the various accusations made against the company this year.

A book in January alleged there had been severe failings in care in an Orpea nursing home, triggering a wave of negative media reports and prompting the government to plan legal action against the care group. read more

Orpea shares have plunged over 70% this year. They lost around 1.2% in early trade on Thursday.

On Wednesday, Investigate Europe published an article on its website which probed Orpea's financial structure, which the website said involved the use of Luxembourg and could have led to possible financial wrongdoing. read more

The Investigate Europe report, like the one from France Info, was also based on facts Orpea reported to authorities as part of the ongoing investigation.

"Internal measures were immediately taken to remove the persons likely to be involved in these frauds and to strengthen the Group's internal control procedures," Orpea said on Thursday without indicating the specific accusation it was referring to.

(This story corrects first paragraph to remove reference to timing of contact with legal authorities)

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Reporting by Tassilo Hummel; Editing by Himani Sarkar

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