Parents pin schools down

Accuse them of floating shell firms, violating CBSE, ICSE norms

The Hyderabad Schools Parents Association (HSPA) held a press conference at Somajiguda Press Club on Friday to release the results of the investigation conducted by parents on how schools were managing to hide their profits.

Murky details regarding shell companies, foreign direct investments, and exorbitant rents were allegedly uncovered via papers procured from government authorities after filing RTIs.

N. Subramanyam, the president of HSPA says, “I started this battle when my daughter was in second standard and now she has given her Neet exams. Schools continue to raise fees as they please. Many schools such as Chirec have a fixed deposit of `20 crore, which is a large amount. As a nonprofit organisation, it is against the law for them to have such high profits. Moreover, schools in TS have two or more shell companies that are used by the school management to divert funds. These shell firms reduce the profit in the balance sheet of schools.”

Complaints of children being forced to purchase books from the schools at high prices, were also addressed.

According to V. Venugopalan, a chartered accountant, “CBSE and ICSE schools do not get approval until they agree to be non-profit firms. Diverting funds to subsidiary firms that are owned by a relative or a member of the trust is illegal. The trust can have a corpus fund but it can’t have shares or foreign direct investment in any company, or vice versa.”

“Foreign investment of around `70 crore has been found in 60 schools of Gowtham Model Schools. Navneet Learning, a publishing company, has 3,062 shares in Gowtham Schools, making it mandatory for all students to buy their books and stationery from Navaneet Publications,” says Ashish Naredi, executive committee member of HSPA.

Another common complaint raised was that the land owned by the owners of schools is often leased out at exorbitant rates.

The balance sheets of schools show the rent paid by them as `10 crore or more when it is actually income derived from the lease.