Fraud hits Advtech stock
The education and staffing group has uncovered fraud by a financial manager in its schools division
Shares in private education conglomerate Advtech — which owns brands such as Crawford Colleges, Trinity House, Abbotts and Varsity College – took a beating after management stumbled on fraudulent activities in its core schools division. Although the financial impact of the fraud is small when measured against market capitalisation and bottom-line profits, Advtech’s share price finished 3.99% down at R15.65. In a voluntary announcement issued on Friday, Advtech said a restructuring of the company’s finance and administrative functions in the schools division had uncovered incidents of fraud that spanned three years from the 2015 financial year. In aggregate, the misstatements and cash loss amounted to R48.1m, which meant a R35.5m after-tax impact over three years, it said. Advtech will account for the effect of the fraud in the 2017 annual financial statements. Events showed that the move by Advtech to centralised cost control was necessary as this fraud was happening at schools leve...
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