Chennai: Education baron and billionaire Sunny Varkey-controlled Everonn Education has gone into liquidation with the Madras high court appointing a provisional liquidator who has been ordered to take possession of all the assets immediately. Varkey Group’s GEMS Education had invested nearly Rs 500 crore in Everonn in 2011 to gain a foothold in the Chennai-based education and training company.
After multiple offers, the Dubai-based GEMS Education had managed to pick up nearly 40% stake in Everonn. SKIL Infra’s Nikil Gandhi (categorized as promoter) holds nearly 14%, but is at loggerheads with the GEMS Group. Both groups have initiated legal action against the other for fraud and misappropriation.
“The court (Madras HC) has appointed provisional liquidator and has inter alia directed the said provisional liquidator to take possession of all the company’s assets and has instructed the directors to file the statement of affairs of the company as mandated under Section 454 of the Companies Act, 1956,” Everonn said in a statement. The winding up petition was filed by Hewlett-Packard Financial Services (India).
While the liquidation has begun, several banks have started their own litigation against the company for default in which they claimed that there has been misappropriation and diversion of funds.
“P Kishore was the founding promoter of Everonn Education, which was acquired by our group in India. After the takeover, as soon as the new board realized that books were fictitious and the accounts had been manipulated, the company initiated cases against the erstwhile promoters P Kishore and Nikhil Gandhi including a complaint with crime branch and serious fraud investigation office,” a spokesperson from GEMS Education said in a statement.
Everonn offered satellite-enabled learning, by facilitating e-classrooms across remote locations of the country. It also forayed into skill training. Everonn under GEMS has been facing serious management issues. “There have been five CEOs and four CFOs between 2012 and 2016,” a former Everonn official told. He said that when Varkey took over the company in 2011, the outstanding order book was Rs 400 crore.
“The present management has now claimed fraud by the previous management. There was no mention of any fraud in any quarterly review or annual reports till 2015. In 2014 they even restructured their loans with the banks and were given a 2-year moratorium on interest payments. Will ICICI Bank reschedule loans if there was a fraud?” a former employee said.
The company at its peak employed nearly 8,500 persons, which has now dwindled to barely 50. Its stock has been suspended from trading on the bourses. Everonn had signed an MoU with the National Skill Development Corporation (NSDC) for skill training and an equity investment of 27% by NSDC into Everonn. They went on to lose the NSDC contract for both skill training and equity investment for not adhering to commitments.
GEMS Group and Kishore too are locked in arbitration proceedings over not honoring financial commitments. “Further, in another matter, the high court has also instructed the ministry of corporate affairs to investigate the affairs of the company during the tenure of the erstwhile promoters and file a report of investigation. The matter is subjudice,” a GEMS’ spokesman said.
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