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Why the Intueri share price has crashed today

Intueri Education Group Ltd (ASX: IQE) has seen its share price plunge by more than 40% to less than 30 cents, after reporting that the Fraud Squad Office was seeking information on one of its colleges.

That clearly suggests to shareholders and investors that authorities don’t just think something improper has occurred but suspect that fraudulent action may have been committed by one of the education providers colleges.

Intueri’s share price has dropped from a 52-week high of $2.84 early in 2015, after the education provider was embroiled in controversy surrounding the Australian vocational education and training (VET) sector. A number of vocation education providers in Australia are being investigated, several have seen their government grants withdrawn or severely cut back.

Shares in Australian Careers Network Ltd (ASX: ACO) may never resume trading, after being suspended in October 2015, while Vocation Ltd (ASX: VET) fell into administration in November 2015.

Intueri itself faces reviews by New Zealand’s Tertiary Education Commission (TEC) of two of its schools, which is said could impact revenues by between $4 and $5 million.

The company has consistently noted that its business model is significantly different to those under review in Australia, so today’s announcement has come as a major shock to investors.

Foolish takeaway

The vocational education sector appears to be a minefield for investors at the moment and it may pay to stay away until the smoke clears. Judging by Intueri’s announcement today, we may have some time to wait.

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Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned. You can follow Mike on Twitter @TMFKinga

Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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