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Educomp welcomes inquiry into accounts

Educomp welcomes inquiry into accounts
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First Published: Wed, Feb 04 2009. 01 15 AM IST

Account Inspection:Educomp CMD Shantanu Prakash says the firm hasn’t received any official information about the inquiry. Harikrishna Katragadda / Mint
Account Inspection:Educomp CMD Shantanu Prakash says the firm hasn’t received any official information about the inquiry. Harikrishna Katragadda / Mint
Updated: Wed, Feb 04 2009. 11 26 AM IST
New Delhi: India’s biggest computer training company by market value, Educomp Solutions Ltd, said it hasn’t received any official information about an inquiry into its accounts and that it would welcome any such investigation.
“We have not yet received any official intimation so far,” chairman and managing director Shantanu Prakash said in a phone interview on Tuesday. “In fact, we have approached the government and requested” an investigation.
Account Inspection:Educomp CMD Shantanu Prakash says the firm hasn’t received any official information about the inquiry. Harikrishna Katragadda / Mint
On Tuesday, Educomp shares fell 12% to close at Rs1,490.05 on the Bombay Stock Exchange (BSE). The stock dropped as much as 17% earlier in the day after news agency ‘Press Trust of India’ said the government was investigating the company.
Meanwhile, the firm informed BSE that it will appoint global consultancy firm Grant Thornton as internal auditor of the company. A company spokesperson said this is to improve corporate governance and the regular auditor will stay in place.
Educomp had said on 21 January that it had lodged a complaint with the police to investigate “malicious emails”.
Prakash said at the time that there had been “an attempt to draw a parallel” between the company and Satyam Computer Services Ltd, at the centre of the nation’s biggest corporate fraud inquiry. The reports were intended to harm the company’s reputation and drive down its stock, Prakash had said at the time.
“We are happy that the government is doing this because we will get the opportunity to get a clean chit,” Prakash said on Tuesday. “We are highly transparent and have a very high disclosure standard.”
The government has ordered the inspection of accounts of some state-owned and non-state companies for greater transparency after the Satyam fraud became public, corporate affairs minister Prem Chand Gupta said on Monday.
“There are certain companies where investigations will be done very soon,” Gupta had said, declining to name the companies. “Our idea is to clean the system. The corporate sector is expected to follow best practices as far as corporate governance is concerned.”
The account inspections come after an alleged fraud at Satyam left the firm scrambling to hold on to customers and find money to pay salaries. The accounts falsification went undetected for years until former chairman B. Ramalinga Raju’s confession last month.
Bloomberg / PTI
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First Published: Wed, Feb 04 2009. 01 15 AM IST