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Staff, students owed millions as Wall Street English China shuts down

Wall Street English China is expected to file for bankruptcy after financial struggles during the pandemic, leaving thousands of teachers owed months of back pay and former students gearing up to take the company to court for refunds.

Wall Street EnglishCentres are now shut in China. Photo: China Daily

Chinese media outlets have suggested as much as 100 million RMB ($15 million) could be owed to students

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.”

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3 Responses to Staff, students owed millions as Wall Street English China shuts down

  1. A bunk response from WSE International…

    Anyone selling WSE worldwide is controlled by HQ via the franchise agreement. WSE International can put QA controls in place and revoke product licensing at any time.

    The whole ” they’re independent branches” excuse is a tired, bored obfuscation they’ve been pulling out of their back pocket for years now.

  2. “The best performance in three years” to describe Q4 of 2020 was a total lie. I know one of the sales managers who ran a Centre. She told me it was a lie and most Centres hadn’t even reached targets; not that the teachers needed telling. Centres were closed (permanantly, or temporarily due to Covid) and service staff didn’t see many new contracts coming through.

    Senior management have completely abandoned staff. They didn’t even have the decency to send an e-mail or host a Zoom call. Team Leaders sent a WeChat message to say “all Centres nation-wide will close permanantly effective immediately. It’s finished”. Where is David Kedwards and Pecce? They have a lot of explaining to do.

    No communication, no salary for three months. Staff, students, suppliers and landlords treated with utter contempt. e-mails signed “WSE Management” sent to staff late in the afternoon, on the final day to pay staff their salary which was promised by management. Payment plans created by management themselves without consulting staff. Weasel-words, empty platitudes and corporate spin.

    So many lies and broken promises.

    This, from the Wall Street English China web site: “Our core values are Respect, Integrity and Responsibility. These values impact everything we do, from how we treat people to how we conduct our business.”

    The one month free study offered by EF is insulting. It is opportunistic and unhelpful. After going through the WSE insolvency, and the four week period (or more likely, during) students will have yet another company’s pushy sales rep to deal with, trying to play on their fears and frustration.

    One final point. Tis case has gathered such widespread media coverage in China that few students are likely to pre-pay years of tuition again with *any* English training company. Chinese students will be too weary of another western training school collapse after seeing what happened to WSE. The lack of confidence in these companies’ viability and resulting reluctance of students to pay in advance for contracts is likely to become a self-fulfilling prophecy.

  3. I am one of those employees who is owed three months’ salary. If Luigi Peccenini really is a billionaire, he can afford to pay us and refund the students from his own pocket without it hurting him. That would be the honorable thing to do, so why doesn’t he do it?

    That said, I am skeptical of the “leaked conversation.” I have listened to it. Do you have three sources who can authenticate it?

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