The share price of Everonn Education Ltd, backed by investors like New Vernon Capital and Blackstone’s India Fund Inc., collapsed by another 20 per cent on Monday, as it took a beating after its co-founder and managing director P. Kishore was arrested by the CBI in an alleged bribery and tax evasion case. The news of the arrest, which came out last week, also led to the resignation of its chairman, Dr Jamshed J. Irani.

Nikhil Gandhi, whose SKIL Infrastructure picked up 21 per cent stake in Everonn last year to become a co-promoter, is reportedly set to take over as the chairman of the company. SKIL, which filed for an IPO earlier this year, picked up the stake for Rs 208 crore in the Chennai-based fully integrated knowledge management, education and training firm.

Everonn informed the exchanges on Friday that it had appointed whole-time director Susha John as the chief executive officer (CEO) to exercise the powers delegated to the managing director. The Board also appointed a business council consisting of two independent board members to advise the CEO.

“The company shall extend all co-operation to all concerned as necessary to clearly demonstrate its commitment and adherence to principled corporate governance. The Board has unanimously expressed their confidence in the management and the business. They have also expressed their confidence in the management’s ability to steer the company forward successfully,” the company said in its statement.

The share price of Everonn has fallen over 40 per cent since the news of the arrest came in. It is currently at Rs 281.2, compared to its 52-week high of Rs 756.45. Everonn, one of the most sought-after stocks in the education space, currently has a market cap of Rs 540 crore.

For Q1FY12, Everonn reported 50 per cent increase in total income to Rs 66.85 crore, with net profits increasing by 52 per cent to Rs 11.03 crore.

The company had recently formed a joint venture with the government’s National Skill Development Corporation (NSDC). The new JV is called Everonn Skill Development Ltd and it has plans to invest Rs 700 crore for setting skill development centres across the country.

The education sector has seen an increasing interest from PE players, with investments of $190 million across 23 deals in 2010, as compared to 10 deals worth $128 million in 2009, according to VCCedge, the financial research platform of VCCircle. There have been 14 deals worth $94 million so far this calendar year. 

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