Elephant writedown on ClinTec investment rises to £2.5m

ELEPHANT Capital, an Aim-quoted private equity company, has been forced to increase the writedown on its £8 million investment in Glasgow-based contract research firm ClinTec.

In March, Elephant blamed "underperformance" for a likely charge of 2.1m on the investment which gave it a 28 per cent stake in the company founded by Asian entrepreneur Rabinder Buttar.

But the London-based firm has revealed in its newly filed interim accounts that the final figure for the writedown has risen to 2.5m, less than a year after it made the investment.

Elephant chairman Pramath Raj Sinha described the weaker than expected performance at ClinTec and the writedown as "extremely disappointing".

"The company's forecasts were adjusted downwards, as pipeline projects were slower to come on stream than anticipated and as contracts were delayed or cancelled," he said.

Despite rapid expansion by ClinTec over the past year, revenues have been slower to come on stream than anticipated as some projects did not convert to orders at the rate expected and others were cancelled.

But Sinha stressed that the "board continues to have confidence in the business model and is supportive of management's efforts to get the business back on track".

Elephant, which specialises in investments related to India, bought the stake in ClinTec through its Tusk Investments Fund. Gaurav Burman, managing partner of Elephant, also pumped in 150,000 of his money, with fellow director James Hauslein investing 200,000. As part of the deal, Elephant appointed three directors to ClinTec.

Buttar, named Ernst & Young Scottish Entrepreneur of the Year in 2010, founded ClinTec in 1997 to carry out clinical research work for pharmaceutical firms, biotechnology companies and medical device makers.