The first hint of trouble came at the start of the pandemic in March 2020, when the company cut staff pay for February by 50% without agreement from staff and enacted lay offs. Later that year, the company was sold by Baring Private Equity Asia and CITIC Capital Holdings to original owner Luigi Tiziano Peccenini, who had launched the company’ first centre in Italy in 1972.
“[Q4 of 2020 had] the best performance in nearly three years”
Early this year however, the company led staff to believe things were improving, describe Q4 of 2020 as “the best performance in nearly three years”, and emphasising new cost reduction methods and improvements in productivity.
In the same email, it then said that there would be delays to staff salary payments. Changes to payment dates and amounts continued until July. Some staff now say they are owed more than three months of their salaries.
A final letter on July 30 told staff the company it was “confident” it would “get back on track and resume normal performance in early August”.
Staff described to The PIE that from this point there were no official emails, with communication taking place over calls and WeChat. Emails to Wall Street official emails that The PIE News attempted to contact bounced back.
According to recorded discussions shared with The PIE, upper management and Peccenini were until recently in the process of trying to find investors in the company and claimed to have some that were interested, as well as the possibility of acquiring a large bank loan from the Bank of Xiamen.
Following new government restrictions about the running of English language courses, the investors backed out and the loan Peccenini had attempted to acquire was ultimately turned down.
In an email, however, national operations director Tim Russ encouraged centres to “absolutely” continue selling courses when some centre directors expressed concern about doing so. One was particularly concerned about an upcoming appointment in Shanghai with a potential client interested in an expensive VVIP package who happened to be a “big lawyer”.
Among students who are now faced with no classes after purchasing tuition from one of China’s most expensive English language course providers, organised groups seeking refunds believe the continued selling of packages in August amounts to fraud, although one lawyer The PIE spoke to said it will be almost impossible for students to claim refunds as the company simply does not have the money.
Some Chinese media outlets have suggested as much as 100 million RMB ($15 million) could be owed to students.
Meanwhile, both EF and New Oriental have attempted to attract former WSE students, with the former offering special discounts and the latter a one month free course.
Teachers The PIE spoke to in Guangdong province in the south of China said they had been encouraged by government officials to go to arbitration with the company, with one describing them as “very helpful”, and even providing assistance to staff who did not speak Mandarin.
A leaked conversation between David Kedwards, CEO of Wall Street English, and a staff member revealed that the company has been told by local governments in the cities where they operate that they are not allowed to make any official announcements, which may be why the expected bankruptcy announcement this week was delayed.
The role of Kedwards in the operation of Wall Street English China has made the situation even more confusing for staff. Despite appearing on multiple emails, Kedwards said he has not held any ownership or executive position with WSE China since July 2020 and furthermore had had no contract of employment or renumeration from Wall Street English China.
“Asia Education Consulting Ltd, the private company that owns and manages Wall Street English in mainland China, is not a franchise and operates independently”
“Asia Education Consulting Ltd, the private company that owns and manages Wall Street English in mainland China, is not a franchise and operates independently,” development marketing manager Marie Breuil explained when asked whether WSE Global owned operations in China.
“We are aware that the business along with many others in China (particularly in the retail and education sectors), has been facing significant difficulties due to continuing impact of the Covid-19 pandemic and the increasingly difficult regulatory environment in the country.”