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Shares in Freedom Care Group (ASX:FCG) were down more than -3% on Wednesday after revealing the NDIS wants to revoke its licence. Freedom Care has hired lawyers in turn.

The company is, ultimately, dependent for cashflow on being a services provider under the national disability welfare program. (Despite being called a “scheme” to avoid using the word welfare, NDIS is clearly a welfare program.)

But there’s a problem with that. The NDIS Commission, which does what it sounds like, wrote to FCG on Monday to tell it the Commission had formed a view its registered NDIS status should be revoked, and that it ‘may’ make an order for permanent ban.

That would mean FCG would be unable to re-register for the scheme later down the line. The Commission’s decision comes as a controversial Bill Shorten-led cost cutting review of the entire welfare program rolls on.

Why exactly the NDIS Commission has moved to ban FCG’s registration status is unclear but the company did note one issue at the end of its announcement on Wednesday.

“As noted in [our last quarterly, FCG] has also been affected by a payment suspension from the NDIS, due to a protracted review of FCGPL’s support services claims,” Freedom Care wrote.

“[We have] been advised by the NDIS that an update of this review will be provided this week.”

A subsidiary of the same name processes the payments and FCG says that entity handles about 80% of cash generating activities.

Company Non-Exec Chair Zoran Grujic noted the company was subject to an NDIS audit in late October, though, under the welfare program, those audits are annual events for registered providers.

FCG last traded at 12.5cps.

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