Listed IT channel giant Powerlan is pursuing legal action against the Sydney Morning Herald over controversial articles it published this week.
Powerlan yesterday issued a statement to the ASX in defence of articles published Wednesday that claimed its training offshoot, the Australian IT Careers Institute, is at the centre of a dispute over "shoddy practices" involving its Asian students.
SMH ran a news article quoting Australian Computer Society CEO Dennis Furini, commenting he would investigate Powerlan's apparently unauthorised use of ACS accreditation in marketing material.
Furini's comments followed a previous article quoting students of Powerlan's college complaining courses promoted in Asia were not available when they arrived in Australia. In addition, the SMH printed student complaints over inability to access the Internet and claims once-promised work experience was now no longer available as part of specific courses.
Powerlan's ASX statement said: "The articles contain inaccurate statements in respect to the operation of the Australian IT Careers Institute.
Powerlan's lawyers, Atanaskovic Hartnell, are taking action against the SMH's publisher John Fairfax Holdings Limited over "incorrect and defamatory" statements made in the articles and requested appropriate retractions.
"The Directors of Powerlan are confident that the operations of the Institute are being conducted in a competent manner within statutory requirements and that the educational commitments of the organisation are being fulfilled. The Institute has in order of 200 currently enrolled students throughout Australia," he statement concluded.
Powerlan's share price dropped five per cent Wednesday to $1.45 on the day the article was published. Powerlan closed at $1.44 yesterday.