Shares of retirement home Orpea plummet as France plans criminal complaint against it

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PARIS, March 28 (Reuters)Shares in the French nursing home company Orpea ORP.PA sregroup Monday after the French government announced its intention to file a criminal complaint against him.

Orpea shares down about 7% at the start of the session, while shares in rival Korian KORI.PA also fell 3.1%.

After a month and a half of investigation into the group’s management and financial practices, the government said it had found “significant dysfunctions in the management of the group, to the detriment of the care of its residents”.

Orpea said that while the government report “highlights certain dysfunctions”, it “also allows the conclusion that there is no organized ‘system’ which would lead to widespread abuse”.

A book by freelance journalist Victor Castanet in January reported serious lapses in hygiene care at an Orpea retirement home in an affluent suburb of Paris. The French group has repeatedly denied systemic shortcomings and said in its statement on Saturday that it denies “several particularly serious allegations” in the book.

The government is inspecting the country’s 7,500 nursing homes over the next two years and plans to strengthen legal and accounting rules to better regulate groups managing care for the elderly, with a view to greater transparency on the use of public funds, he said.

(Reporting by Sudip Kar-Gupta; Editing by Dominique Vidalon)

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