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Rediff News  All News  » Business » Educomp refutes accounts manipulation, seeks probe

Educomp refutes accounts manipulation, seeks probe

January 21, 2009 16:40 IST
After its stock fell 22 per cent on the Bombay Stock Exchange, education solutions provider Educomp Solutions filed a complaint with the Additional Commissioner of Police, Economic Offences Wing, Crime Branch (Delhi Police) to identify the source of malicious emails alleging account manipulation, and has sought action against them.

Educomp is seeking further institutional remedies from the government and the market regulators to help protect the shareholders' interests from what seems to be a concerted attempt to damage the reputation of the company and drive down the stock price of the company," said Educomp CEO Shantanu Prakash.

There seems to be an attempt to draw a parallel between the company and the recent developments at Satyam, which have bred suspicion about corporate accounting standards in general among the investor community. "There is no basis for any such reports regarding Educomp and we are determined to protect our shareholders' interests at all costs," Prakash added.

Market rumours are doing rounds that the company's promoters made rapid growth in its turnover and profits by trading in their own shares and that it invested funds in unquoted subsidiaries and raised loans from financial markets by pledging overpriced shares.

Also, it was being alleged that the promoters needlessly raised Rs 314.94 crore (Rs 3.14 billion) via FCCB but encashed its high price in the stock markets to garner as much liquidity as possible.

Refuting these rumours, Prakash, said: "There is a cartel of local brokers that has been spreading rumours for the past few months to hammer the short position of the company, that currently stands at 12 hundred thousand shares."

Meanwhile, the company has already provided detailed clarifications on the issue of its accounting and financial policies to the stock exchanges.

BS Reporter in Mumbai