Raffles Education board says allegations against it in India are 'without legal merit'

REC said the case had been reopened following allegations made by a company associated with Mr Shantanu Prakash. PHOTO: RAFFLES EDUCATION

SINGAPORE (THE BUSINESS TIMES) - Raffles Education Corporation (REC) on Thursday (June 2) said it has learnt that summonses have been issued by an Indian magistrate against the company, certain current and former directors, employees and a consultant.

The advice from its legal counsel in India is that the allegations are "without basis and without merit".

The latest update relates to a case, first announced in October last year, registered with the Economic Offences Wing (EOW) of the Delhi Police.

REC had previously announced that a closure report had been filed. But in its Thursday filing, REC said the case had been reopened following allegations made by a company associated with Mr Shantanu Prakash, the founder of Educomp Solutions and a former business partner of REC.

Following completion of further investigations, EOW has filed a charge sheet with a district court in Delhi alleging, among other things, theft, forgery and extortion against Mr Prakash and his associates.

The court magistrate has ordered summonses to be issued against the company and its chairman Chew Hua Seng, directors Lim How Teck and He Jun, and former directors Gan Hui Tin and Teo Cheng Lok.

Summonses were also issued against current employees: Mr Chew's wife Doris Chew, his son Chew Han Wei, legal director John Tham and Mr Saurabh Sharma - a consultant to one of REC's wholly owned subsidiaries in India.

The company and the accused persons have yet to receive service of any such summonses, REC said.

In its filing, the group said it intends to "rigorously defend its position". There is also a "good chance" of having the case quashed, according to its legal counsel in India.

The group's India legal counsel holds the view that the accused persons who are directors or key management were named in the charge sheet only by virtue of their designations in the company at the relevant time.

For the accused persons who are employees but not directors or top management, the Indian counsel believes they, too, could successfully maintain a challenge to the summons as the allegations against them are similarly without basis and without merit.

The summoning order and resulting proceedings against the company and other accused persons can be argued to be an "abuse of the process of law", REC said.

REC, Educomp and Mr Prakash have had a long-running dispute.

An arbitration tribunal in India had passed an arbitration award against Educomp and awarded REC damages of around 163.2 million rupees (S$2.9 million) - a decision that REC said Educomp has to date failed to comply with. The arbitration proceedings were regarding breaches over a share purchase agreement.

REC also reiterated points from an earlier announcement that Mr Prakash has several pending civil and criminal investigations in India against him.

REC shares were trading flat at 6.1 cents as at 2pm on Friday.

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