Shares in care homes company Korian drop as lawyer says she is preparing lawsuit

PARIS (Reuters) -Shares in French care homes company Korian slid lower on Monday after a Paris lawyer said she was preparing a group lawsuit against the company.

Lawyer Sarah Saldmann told FranceInfo radio over the weekend that she had received “dozens of complaints” by relatives of people living in elderly care facilities run by Korian, adding she intended to bring a group lawsuit, grouping together the claims of numerous individual plaintiffs, in April.

Saldmann also confirmed her planned legal action against Korian on her official Twitter account (@SarahSaldmann).

Korian in a reply to Reuters said it strongly denied any allegations of mistreatment, adding that – although it had not been notified of any collective legal action – it would treat any such legal action with the most serious consideration.

Korian shares were down 4.2% in early session trading, with the stock down by around 40% since the start of 2022.

Shares in Korian have slumped within the last two weeks since the first extracts of the “Les Fossoyeurs” book alleging malpractices in care homes run by Korian’s rival Orpea were published, triggering a public outcry, government probes and the departure of Orpea’s CEO.

Last week, Korian shares dropped further after a well-known French investigational TV host said she would reveal new information on the sector later in February.

Korian had already said, in response to the forthcoming TV documentary, that it was ready to answer any questions raised in that report, and that the company did not deserve the negative media coverage.

Shares in Orpea, which has also denied wrongdoing, were also down by around 2%.

Saldmann said in the interview that the publication of the book has set off a collective reckoning about the way France’s elderly are being treated in facilities run by private companies that have to make a profit for their investors. Referring to Korian, she said that problems raised to her by family members seeking advice were “noticeably the same as those at Orpea.”

(Reporting by Tassilo Hummel;Editing by Sudip Kar-Gupta)