Educomp ON HOLD

Educomp puts off expansion plans AESHA DATTA RICHA MISHRA

NEW DELHI, SEPT. 4: 

Going by the plans of the country’s largest digital education company, Educomp, it looks like the economic slowdown has caught up with the ‘recession-proof’ education sector.

Educomp Chairman and Managing Director Shantanu Prakash said the company, which has seven or eight major subsidiaries running a host of businesses, right from pre-schools to smart classes, plans to remain cautious with its expansion plans over the next few quarters.

“Right now, given that the cost of debt is very high, it makes no sense to launch new projects. We are continuing with our existing business plans. We find this year may be the year of consolidation for the company,” he said. Educomp, which recently raised $155 million from global investors and the International Finance Corporation, has no plans of raising more money in the near future.

“There is so much demand for education and the demand is not going anywhere. So we can be patient as well,” Prakash added.

The company, which suffered its share of controversies, including an investigation by the Ministry of Corporate Affairs in 2009 and raids by taxmen, has come under the scanner once again on the company’s corporate governance practices following a report by investment bank Espirito Santo that flagged off concerns regarding the independence of EduSmart’s auditor and the resignation of four company secretaries.

Prakash explained, “In India, when you operate a business, the regulatory agencies definitely have a right to know what is going on. And they will know. By itself, that doesn’t meant something is wrong.”

He added that the governance issues raised by Espirito Santo stand resolved.

With regard to investments by foreign institutional investors, Prakash said they currently stand at around 30 per cent. “FIIs have invested more than Indian domestic firms. However, in the last one to one-and-a-half years FII holdings have come down steeply and domestic holdings have gone up sharply. Still, FII investments are higher.”

aesha.datta@thehindu.co.in

http://www.thehindubusinessline.com/companies/article3859334.ece?homepage=true&ref=wl_home

SAHARA- SUPREME COURT VERDICT

3 SEP, 2012, 07.15AM IST, ET BUREAU 

Sahara investors: Supreme Court not convinced by name and addresses given by company

MUMBAI: Who is Kalawati? Does she exist? What's her real address? These are questions that India's highest court has pondered over to stoke an old suspicion that millions have harboured about Sahara.
''Kalawati' is a name that figures in the long list of investors who subscribed to convertible debenturesissued by the Sahara companies that are under scanner.
She is a 'resident' of Uchahara, SK Nagar, UP, and the agent who brought in the investment of Rs 1,600 is Haridwar of Bani Road, Sant Kabir Nagar. The innocuous information appears on the first page of the voluminous compilation of Sahara's investor details that was presented to the Supreme Court.
But the court was not convinced to go beyond page 1.
Instead, the court, while directing two Sahara companies to refund thousands of crores, has made some obvious observations: it's unclear whether Kalawati is a member of the Sahara group or its associates, or related to Sahara employees; her parentage and husband's name is not disclosed; and the address is of general description with no street name or door number. Also, as a name, 'Hardiwar' is incomprehensible: in India, cites do not constitute the basis of individual names, said the court.
It's a suspicion that Sahara has to counter if it has to survive. This could well be the reason that drove the group to come out with full page advertisements over the weekend. Mentioned in capital letters, the ad claims that "there is not a single benami money and this statement is Sahara's challenge to all authorities of our country". Two Sahara companies have been asked to pay back Rs 17,400 crore along with 15% interest, failing which the capital market regulator Sebi can initiate legal proceedings to seize Sahara's assets and freeze bank accounts to recover funds.
"One would not like to make any unrealistic remark, but there is no other option but to record, that the impression emerging from the analysis of the single entity extracted above is that the same seems totally unrealistic and may well be fictitious, concocted and made up," said the court. It felt that many transactions are not expected to be casual, certainly not in the manner expressed by the two companies.
Interestingly, Sahara India Real Estate Corp, which raised bulk of the funds, had cash and bank balances of Rs 6.7 lakh and net current assets of Rs 6.54 lakh as on 31 December 2007. Together with Sahara Housing Investment Corp - the company that has been asked to refund investors - have raised as much as Rs 40,000 crore so far through issuance of optionally fully convertible debentures. Till August 2011, the two entities had collected 24,029 crore (net of premature redemptions) from 2.9 crore investors. Now, Sebi has the humongous task of ascertaining the genuineness of the investors as well as the amount deposited by them.

http://economictimes.indiatimes.com/news/news-by-company/corporate-trends/sahara-investors-supreme-court-not-convinced-by-name-and-addresses-given-by-company/articleshow/16227344.cms