France probes care homes group Orpea after malpractice claims

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  • France launches probes into Orpea
  • Company has denied allegations of mistreatment
  • Says will cooperate with investigations
  • Orpea dismissed its director general on Sunday

PARIS, Feb 1 (Reuters) - France will launch a wide-ranging investigation into care homes group Orpea (ORP.PA), which is at the centre of allegations of malpractice it has repeatedly denied, the government said on Tuesday, adding it would also review rules for the whole sector.

Orpea, one of Europe's biggest for-profit care home groups alongside French rival Korian (KORI.PA), has lost around half its market value since the first extracts of a book alleging malpractice in its care homes were published on Jan. 24.

"These are extremely serious allegations," Prime Minister Jean Castex said of the accusations. Made in the book by independent journalist Victor Castanet, they include claims of severe failings in hygiene care in a home for elderly people in a wealthy Paris suburb.

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Orpea's care homes will be subjected to administrative and financial checks across France, Castex and Minister Brigitte Bourguignon said, after she met Orpea's bosses on Tuesday.

The government, Castex told parliament, will also look into strengthening the requirements for companies to open and run care homes. Proposals are expected by the end of the month.

Philippe Charrier, who was appointed as Orpea's new CEO on Sunday as the previous one was fired following the allegations, said he welcomed the government's upcoming checks and Orpea would cooperate with authorities.

He also reiterated the group's rejection of allegations of widespread maltreament.

"Several of those accusations (in the book) are baseless, I have proof of that," he told reporters after meeting Bourguignon, without going into details.

The group was not perfect, but was trying to be, he said, adding that Orpea was also launching its own, independent audit.

Orpea is rapidly expanding, adding over 1,000 beds over its third quarter last year, as it looks to increase its revenue by more than 14% to over 4.2 billion euros ($4.73 billion) this year compared to before the pandemic.

Its shares traded below 40 euros for much of Tuesday, their lowest level since 2013.

($1 = 0.8879 euros)

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Additional reporting by Benoit Sudip Kar-Gupta, Sophie Louet Writing by Ingrid Melander; editing by Barbara Lewis

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