TEC seeks $1.47M refund from Intueri   23 Jun 2016

Thursday 23 June 2016 11:03 AM

TEC seeks $1.47M refund from Intueri after dive school probe finds courses under-delivered

By Jonathan Underhill

June 23 (BusinessDesk) - Intueri Education Group must repay $1.47 million plus tax to the Tertiary Education Commission (TEC) after an investigation into its dive school showed some student enrolments between 2009–2014 could not be validated and some courses under-delivered against their funding agreement.

The refund exceeds the $1.12 million that Intueri provided for in its 2014 accounts and the balance would be recognised in the company's first-half results for 2016, the Auckland-based company said in a statement. Intueri said it "is actively seeking recourse from the dive school vendors".

New Zealand's largest private training institution, which listed in May 2014, has had a troubled life since deciding to go public. It was forced to amend its prospectus after the death of a foreign diving student at its NZ School of Outdoor Studies (which trades as NZ School of Commercial Diver Training) in April of that year. In March this year it was ordered to pay about $150,000 in reparations to the student's family after pleading guilty to one charge under the Health and Safety in Employment Act in addition to a $54,000 fine.

The TEC also has a separate investigation underway into Intueri's main domestic unit, Quantum Education Group, where concerns had been raised about the performance and reporting of high student completion rates that didn’t match the real number of student enrolments. The Serious Fraud Office is also looking into Quantum. The company incurred a warning from the Financial Markets Authority over its 2014 prospectus, which said elements of the offer document could have been clearer.

The shares last traded at 35 cents and have shed 85 percent of their value compared to their 2014 IPO price of $2.35. The company was taken public by owner Arowana International, which spun off the private training school operator about a year after its own listing on the ASX through a reverse takeover.

Last month, Intueri's directors halved their base fee as the company looks to slash costs, having cut 70 jobs and suspended dividend payments. It reported a net loss of $48.5 million for calendar 2015, mainly due to a full write-off in the value of Quantum and impairments at its dive school and Design & Arts College.

Its 2015 accounts were tagged by its auditors over the company's ability to continue as a going concern. Since then Intueri has confirmed an extension of its banking facilities to March 2018, lifted its total facility to $80 million and delayed until 2017 paying A$5 million owed for the acquisition cost of an Australian business.

Chief executive Rob Facer said today that the TEC report, carried out by Deloitte, found no issues of concern in 2015 when the dive school was under Intueri's management "but did find some legacy issues related to the period 2010 to 2014 when the school was under the management of the former owners."

"We're pleased to have resolved this matter with the TEC," Facer said. "Our focus continues to be on the delivery of quality commercial diving programmes which provide students with internationally recognised diving accreditations and qualifications."

(BusinessDesk)

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