Educomp Solutions, the Delhi-based education service provider in the middle of a market mayhem involving a crash in its share price, welcomed a government probe into its accounts on Tuesday, saying it would only take on what it believes to be a gang of market bears out to hammer its stock.
The Registrar of Companies has launched a probe into the company, besides six public sector companies. The probe is not an unusual one, and is a part of random checks by the government.
Shantanu Prakash, chairman and managing director, Educomp Solutions told Hindustan Times that the RoC move is part of a regular ritual. “We are happy that RoC has undertaken a probe into the matter, there is a bear cartel working against Educomp and we would want the issue to be sorted out,” Prakash said.
Speculative reports that Educomp has been doctoring its books to inflate share prices have hit the company’s share in a market whose sentiments have been ravaged by the fraud in Satyam Computer Services. Its shares have fallen 65 per cent from its year’s high and tumbled by 12 per cent on Tuesday.
Prakash said his company has sought Securities and Exchange Board of India (SEBI)’s assistance to initiate an investigation into the issue and put an end to such “baseless reports.”
"We are a victim of concerted attacks by the bear cartel, who are trying to hammer our stock prices... We have noticed unusual trading patterns and short-selling on stocks. These are efforts to manipulate the market. We are open to scrutiny
of any kind by the investigating agencies," Prakash said.
Meanwhile, Educomp also announced its plans to set up budget schools called Vidya Prabhat across small “Tier III” cities in India.
The schools will be set up by Educomp Infrastructure, a subsidiary of Educomp Solutions at an investment of Rs 70 lakh per school including the cost of land and construction as against Rs 3.5 to Rs 5 crore that it takes to set up a similar establishment in the metros.