English school owner arrested over contract fraud
Print Edition
The owner of Join Our World, a chain of local English training schools for children, has been arrested for contract fraud after selling courses despite his company’s impending insolvency, Pudong police said yesterday.
According to authorities, in May the school’s 16 branches in Shanghai were all shut down overnight. Notifications posted on the doors of these branches explained that classes were suspended “temporarily” due to a “capital chain rupture,” but the owner was seeking financing and dealing with the problem with related departments.
However, after receiving complaints from parents who paid for classes, police officers in Pudong arrived at the scene only to discover that the school’s owner, surnamed Li, had fled Shanghai.
Further investigation showed that Join Our World had no permit or license to run a school.
More than 170 foreign teachers at the school were also found to have no teaching qualifications. Most of them came from non-English-speaking countries like Serbia and Ukraine.
Police said that between March 2016 and December 2018, the school failed to turn a profit. Moreover, in October last year, the school ran out of funding and could not afford to pay employees’ salaries.
Despite mounting financial difficulties, police said that Li continued to market classes to parents and didn’t take any measures like downsizing to improve the business situation.
Join Our World was founded by Li with some 360,000 yuan (US$51,230) in initial funding. Since it opened in 2016, Li was said to have taken tuition fees from over 6,600 students at prices ranging from 11,800 to 35,600 yuan each, adding up to 125 million yuan.
The value of undelivered classes is said to total more than 13 million yuan.
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