Intueri cautions investors as cloud hangs over education firms following ASQA audits

Intueri’s share price has imploded after two of its subsidiaries were ruled non-compliant with standards.

Shares in dual-listed education group Intueri are now nearly worthless after the company sounded the alarm on its ability to operate as a going concern given two of its subsidiaries were ruled non-compliant with current Australian standards.

The development has seen more than three-quarters of its valuation wiped by traders this morning.

Recent audits from the Australian Skills Quality Authority (ASQA) found issues with admissions procedures, assessment practices and learner support resources, with a response from Intueri required by October 21.

The flow-on effect could, at worst, see the Intueri-owned Online Courses Australia and Conwal & Associates have their registrations cancelled, a result that would cripple the group’s Australian operations.

Intueri (IQE) said it believed some of the findings could be successfully disputed and said it thought a cancellation of registrations would be “unwarranted”.

However, it also warned its ability to operate as a going concern would be in grave doubt if Conwal was stripped of its licence to operate, with a default event likely in such a circumstance.

Investors were brutal in response, slashing 78 per cent of its value in early trade on the ASX.

The move has shrunk the group’s value down from $30 million to just $6.5m, little surprise given Intueri made the unusual announcement to caution against trading in its shares.

“Intueri strongly cautions any investor seeking to trade in Intueri shares, and especially any investor seeking to acquire Intueri shares, to take full account of the information provided in this update before trading and consider delaying any such trading until further information is available,” it said in a statement.

The company added a final decision on the audit outcomes would likely be a few months away.

“Intueri is maintaining its normal operations, with continued bank support and no changes to its current access to the VET FEE-HELP (VFH) scheme in Australia,” the group said.

“At this point in time, Intueri expects to be able to continue to operate as a going concern, but its ability to comply with its future banking covenants is now less certain pending the outcome of the ASQA audits and timing of receipt of the $4m final VFH 2015 payment, previously assumed to be received by the end of October 2016.”