Educomp shares hit by market rumors

Shares of Educomp Solutions nose-dived 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. However, the Managing Director, Shantanu Prakash clarified saying that rumours about directors quitting the company and promoters pledging stake were baseless. The promoters of the company have not pledged any shares and just 5% of their stake has been sold over three years for personal needs, added Prakash. The company also lodged a complaint with the Economic Offences Wing (EO) of the crime branch to probe into the sharp fall in its share price this week. The company also held a conference call to clarify several market rumours regarding its accounting practices. The stock hit a 52-week high of Rs. 4,799 on January 21, 2008 and a 52-week low of Rs. 1,515 on October 27, 2008. This week, it lost 16.3% to end at Rs. 2,088. It is down 33.5% in a month.