For India, to become the global superpower it aspires to be, education is one of the key areas the country needs to work on. As it appears, a certain group with vested interests is conspiring to derail the sector from its path to revival. Who is stalling the fate of a billion people? And why? Do they even understand the urgency and the need for this revival?
Former RBI governor Raghuram Rajan stressed upon the need for new methods to boost India’s education sector, in a recent media interview. He also went on to highlight the importance of private sector’s role in this revival. While there is no doubt that India’s education sector needs immediate redressal of the ills plaguing it, the question remains – where will it come from and who will lead it?
The last leg of tech-driven education revolution in India was led by Educomp during the ‘90s. Though the company is now in for insolvency proceedings, the ideas, technology, expertise and experience give it a futuristic edge like none other. The digital classroom concept introduced by Shantanu Prakash led Educomp provided for an entire new edtech platform. Educomp has all the potential to see a revival under its future leadership, and can trigger the second phase of Indian education sector’s revival.
Waiting to take control of Educomp is a $3 billion multinational tech giant – Ebix. The conglomerate is known globally for its turnaround success stories. Well-equipped and fully-loaded with intent and resources, this Robin Raina led company has time and again proved its commitment towards India , having invested almost half a billion dollars in the country and having made 14 acquisitions.
[su_box title=”Industry Speak” box_color=”#f2f0f0″ title_color=”#130f0f”]”Educomp is one of the players that proved before anyone else that you can scale with an edtech product in India. Having 1000s of schools and lakhs of students under your ambit is a possibility today if you position your product in the right markets, at the right time, and to the right customer base. With the kind of brand value and recognition that Educomp had and now companies like BYJU’s, Cuemath, and a few more, have, you can expect a lot of great news from the edtech space in the coming time.”
– Priyadeep Sinha, CEO, Kidovators[/su_box]
Ironically though, Educomp’s bankruptcy resolution process and change of guards has been stuck in a legal whirlpool for a while now. And a deep dive into the case reveals an evident motivated agenda by vested interests trying to derail the company’s resolution proceedings with the National Company Law Tribunal.
[su_box title=”Turn of Events” box_color=”#f2f0f0″ title_color=”#130f0f”]
- Educomp filed for bankruptcy in 2017. The sale process started, following which the committee of creditors was formed.
- Mahender Khandelwal, a resolution professional from international accounting firm BDO, was voted in by the committee of creditors to take control of Educomp.
- The committee met over 20 times to discuss and debate the proposals at hand.
- A virtual data room was created and prospective buyers got access to it. Following due diligence, two serious buyers put their bids forward.
- Ebix won, and its resolution plan for the company’s revival secured approval of the CoC.
- During the process of resolution, several independent professionals including auditors like PricewaterhouseCoopers (PwC) and Kroll screened the entire process and approved of it.
- Their report, in no uncertain terms, stated that the books were clean and all requisite norms had been followed.
- The matter of related party transactions, as stated under Section 29 (A), were also discussed and Ebix was found not to be a related party.
- After detailed deliberations, and taking into consideration the reports of the independent auditors, the committee of creditors approved the proposal put forth by Ebix Solutions with a 76% majority – well above the 65% mandated by the law.
- [founderINDIA has reviewed a copy of the Kroll and PwC reports, which clearly states that the process followed the law – both in letter and in spirit.][/su_box]
This is where the Educomp insolvency process starts looking suspicious. Enabling ease of starting and exiting business has been high on Modi government’s priority list. The bankruptcy law is one such flagship policy in this direction. But it seems that what Modi proposes, the ‘system’ disposes.
Notwithstanding the processes that have been put in place to ensure this happens, frivolous sounding and trumped up red flags were paraded in a few media stories. The storyline is flimsy, to say the least, but what also raises eyebrows is the fact that the writer is a known telecom expert who has so far in a career spanning over two decades seldom written about legal issues or the education sector.
Red Flag, Red Tape?
What’s even more alarming is the fact that there appears to be a ‘pattern’. The stories get published quite in tandem with the case proceedings. If not in reputed publications, the story finds an odd space on a telecom portal owned by the journalist himself.
As the motivated and agenda-driven nature of these stories became obvious, Member of Parliament Neeraj Shekhar wrote a letter to the Prime Minister, marking several investigative agencies including the Central Bureau of Investigation, the Central Vigilance Commission, and the Bankruptcy and Insolvency Board of India. The letter, which is based on a whistle-blower’s report, clearly states that stories around the process done by a particular journalist are essentially attempts by vested interests to derail Educomp’s resolution process in the NCLT, and appear to be influenced.
The notion that there are some connived attempts behind process-derailing and the appearance of media stories get further strengthened from the facts mentioned in the whistleblower’s letter. There are pieces of evidence showing that Mr. Journalist is receiving a hefty amount of sums from a company that is controlled by one of Educomp’s competitors.
Educomp’s revival poses a direct threat to its competitor Extramarks. One of the directors of Extramarks owns another company. FounderINDIA has proof of this director having paid the journalist in question via his other company account. Seeing the bank transactions, what can’t be outrightly denied is that the two are hand-in-glove.
The MP’s letter also states that there is a direct connection between a beneficiary of the ‘paralytic’ proceedings and the journalist in question.
(founderINDIA is in possession of the Parliamentarian’s letter as well as the whistle-blower’s report.)
The concerted efforts by some individuals acting in such a suspicious manner only ring alarm bells. Irresponsible media reporting might have implications that would not only jeopardize the fate of a particular company but also the overall sectoral growth and revival.
Such misrepresentation and fiddling with facts serve no legit purpose other than delaying the much-needed edtech-revolution in India. A biased and baseless argument must not keep the fate of the nation hanging in limbo. No one has the right to stand between the future of India and this day – not the system itself.