Educomp

Shares of Educomp nose-dived by over 6% to Rs1969 after reports surfaced that the company may have fabricated its accounts overstating its turnover and profits to boost its shares and the promoters exited when stock prices reached its peak.

According to reports, the promoters made over Rs2.5bn in the open market in trading in their own shares. The promoters held 10.8mn shares as on March 31, 2006.

The holding came down to 9.5mn shares on June 30, 2008, showing that the promoters sold more than 1.3mn shares of their company during the period between March 31, 2006 and June 30, 2008.

However, later on the Managing Director, Shantanu Prakash came out and clarified saying that rumors about directors quitting the company and promoters pledging stake, were baseless.

The promoters of the company have not pledged any share and that just 5% of their stake has been sold over three years for personal needs, added Prakash.

The stock had hit 52-week high of Rs4,799 on January 21, 2008 and a 52-week low of Rs1,515 on October 27, 2008.