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Intueri warns investors of Aust audit

NZ Newswire logoNZ Newswire 26/09/2016 Jonathan Underhill

Intueri Education Group shares have slumped 87 per cent after the company said there was a risk that an Australian government audit of its subsidiaries across the Tasman could threaten the viability of the company.

Audits by the Australian Skills Quality Authority (ASQA) found that Online Courses Australia (OCA) and Conwal & Associates weren't compliant with its standards.

Intueri has until October 21 to respond before the ASQA makes a decision, with possible outcomes ranging from a directive to correct areas of non-compliance through to the full cancellation of OCA and Conwal's registrations as registered training organisations (RTOs).

Cancellation of the registration for Conwal, which generates some 95 per cent of OCA's revenue, would place serious doubt on its ability to continue to operate, Intueri said on Tuesday.

It was also significantly hit Intueri's ability to remain a going concern as it would be unlikely to meet its future banking covenants.

OCA accounted for 35 per cent of Intueri's $50.1 million of revenue in the six months ended June 30.

The company is seeking legal advice and reviewing the audit reports as it prepares to respond, it said.

Intueri warned investors to take into account the information before trading in its shares.

The shares had been halted for the announcement at 30 cents, having fallen 58 per cent this year, and tumbled to just 4 cents when they resumed trading today, valuing Intueri at $4m.

While it was too soon to predict an outcome of the audits, Intueri "believes cancellation of registration would be unwarranted".

"A number of the findings are capable of being disputed or remedied" although some are likely to be accepted, it said.

The possibility of an Australian sanction adds to the list of setbacks Intueri has faced since listing in 2014, including New Zealand probes into student enrolments, a student death at its dive school, the sudden exit of its chief executive, and more recently amending its lending covenants that were at risk of being breached.

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