One Gajendra Kumar from Ghaziabad has filed a first information report (FIR) against the promoters of Educomp including its Managing Director Shatanu Prakash. The chargesheet was filed under Sections 420 (cheating), 467 (fabrication of forged documents), 468 (using the same to cheat) and 471 (similar to 468). The Educomp stock today fell 3.18 per cent to close at Rs 1,568 on the Bombay Stock Exchange. Earlier too, towards January end this year, the company’s stock price took a beating on the back of allegations that that the promoters manipulated the account books. The Ministry of Corporate Affairs is currently looking into the case. In an interview to Business Standard, Prakash explains his stand:
What do you have to say about the FIR filed against you?
It is yet another motivated and malicious attempt to sully the image of Educomp. It is unfortunate that our systems make it so easy for any individual to file an FIR based on unsubstiantiated allegations against a known entity whose reputation can be damaged.
What action will you take now?
Our legal department of the company is taking requisite and necessary action on the matter. We have also written to the Prime Minister’s Office, Finance Minister, Home Minster and Corporate Affairs Minister as well as UP Chief Minister’s office and asked them to look into this matter of concerted attacks on Educomp which seems motivated by corporate rivalry and the cartelization of short-sellers, on priority basis. We are requesting for institutional remedies so that such attacks on corporates can be dealt with swiftly and comprehensively.
Do you feel your company is being targeted unfairly?
I think that is for all to see and understand. The sequence of events and subversive acts like circulation of anonymous e-mail and documents, filing of an FIR without any enquiry whatsoever and with disregard to basic norms of propriety, are all self explanatory. The point to emphasise is that no one knows who is accusing Educomp since no known entity has come forth, there is no formal complaint from any known and credible quarters. Everything till date is based on rumours and subversive actions.
What’s the status of the MCA investigation into your company?
MCA has indicated on an earlier occasion that it will complete investigations into all 350 companies announced earlier in the month within 45-60 days. We are awaiting completion of this investigation and looking forward to get a clean chit which can put these rumours to rest once and for all.
How soon do you see Sebi and the EoW take action on your complaint?
We believe that EoW is pursuing the case with vigor and we can expect a breakthrough that could lead to those behind this campaign very soon. Ministry of Finance too has recently confirmed that Sebi is investigating the matter of Educomp share manipulation, based on our complaint. We hope to hear something on that soon.
What steps are you taking to assure investors?
We have had overwhelming support from our shareholders/investors. Our swift and comprehensive action and detailed disclosures have been well received by our shareholders.
The FII holding in Educomp has actually increased from 36.03 per cent to around 39 per cent since January 20.
In addition, during this period leading names like CLSA, Merrill Lynch, Credit Suisse, Alchemy and HDFC Securities have all come out with strong reports on Educomp’s growth and business model while refuting the rumours unanimously.
