After Prime Minister Scott Morrison announced a royal commission into Australia's aged care system the preeminent providers of the service on the ASX saw their shares take a tumble.
At 12.20pm AEST Aveo is down 4.28 per cent to $2.16, Estia is down 18.3 per cent to $2.41 per share, Japara is down 14 per cent to $1.44, and Regis Healthcare is down 14 per cent to $3.12 per share.
The royal commission will focus on residential and in-home aged care for seniors, but will also cover care for young people with disabilities who live in aged care homes.
Since the Oakden nursing home scandal and subsequent closure of the facility aged care providers have come under the spotlight with failures in the sector becoming more apparent.
When announcing the royal commission, Morrison said the commission should unearth some disturbing information.
"I think we should brace ourselves for some pretty bruising information about the way our loved ones, some of them, have experienced some real mistreatment," said Morrison.
"It's going to be tough for us all to deal with. But you can't walk past it."
Estia Health (ASX: EHE) responded to Morrison's announcement this morning, saying it welcomed the commission.
"Estia health today said it supported Prime Minister Scott Morrison's call for a Royal Commission into Australia's aged care sector," says the company in an ASX announcement.
The commission comes at a bad time for embattled aged care services provider Aveo (ASX: AOG) which is currently attempting to rebuild investor and public confidence.
Despite Aveo (ASX: AOG) reporting some solid FY18 results and announcing the completion of its five-year transformation project, investors are still wary of the retirement village operator.
It has been just over a year since the company suffered at the hands of an ABC Four Corners investigation and the threats of two class action law suits; two factors that led to the dissipation of the company's share price in the first place.
Business News Australia