After Biocon, Espirito Santo now questions Educomp corporate governance

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 Espirito Santo now questions Educomp corporate governance
Close on the heels of raising doubts over Biocon's accounting policies, Portuguese Investment Bank Espirito Santo has questioned the accounting practices of Educomp.

According to a report in the Economic Times Espirito Santo analysts, Soumitra Chatterjee and Nitin Padmanaban have said that documents show that the address for EduSmart's auditor - Sanjay Rastogi & Associates - is the same as that of the firm, potentially jeopardising auditor independence.

"Any sense of excessive closeness between company and auditor will naturally concern investors," they wrote in a client note a fortnight ago.

"Third-party vendors are selected based on their distribution capabilities but EduSmart doesn't have any standalone distribution capability," they said.

A few days ago Espirito Santo had downgraded Bangalore-based Biocon to "sell" from "neutral" and sharply revised its target price to Rs 186 a share from Rs 350, flagging off several issues, which it says raise accounting and corporate governance questions over at the biotech firm.

Read more about: biocon, educomp
Story first published: Monday, May 28, 2012, 11:17 [IST]
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