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Department of Further Education, Employment, Science and Technology deputy chief executive Elaine Bensted said the State Government’s priority was the students and ensuring they could continue their study in Adelaide.

Meanwhile, a former director of GEOS Adelaide said the company acted as cash cow for the Japanese parent company.

Gary Maserow, who resigned in October, said he had “no idea” why GEOS Adelaide and eight other Australian GEOS companies went into voluntary administration.

Six of the nine companies recorded profits in the last financial year, according to financial reports completed by BDO Kendalls.

Mr Maserow, who was also regional co-ordinator for all GEOS colleges in Australia and New Zealand, said there was “enormous pressure” placed on the company to send Australian profits to Japan.

“Japan demanded and demanded,” Mr Maserow said.

Dharmadasa Ratnayake Mudiyanselage, a director of the nine Australian companies, said the companies had liquidity problems.

Mr Maserow said he had “no idea” why all of the companies went into voluntary administration.

“What happened in the last six months?” Mr Maserow said. “Because the audit was fine.”

Mr Maserow dismissed suggestions the global financial crisis had contributed to the collapse.

The Australian GEOS companies had two other directors at the time of the collapse: David Emert and Japan-based Tsuneo Kusunoki, who founded GEOS in 1973.

Mr Emert and Mr Kusunoki did not respond to calls.

Administrators Ernst & Young are continuing to investigate the collapse.

http://www.adelaidenow.com.au/news/south-australia/college-collapse-angers-overseas-students-in-adelaide/story-e6frea83-1225827435778

The fate of up to 400 language students hangs in the balance with reports that their schools’ parent company has closed its Australian schools.

This week, eight Australian schools owned by GEOS in Japan closed but the fate of the company’s schools in Auckland, Wellington, and Christchurch remained uncertain, GEOS Auckland manager Stuart Binnie said.

The New Zealand schools are owned by GEOS in Japan but registered here. Between 300 and 400 students from up to 25 countries are enrolled in the three schools, which employ 20 to 30 staff.

If the schools closed, the students’ fees would be refunded or they would be placed in another English language school, he said. “I would guess there would be a lack of confidence in the brand name.”

An industry insider said the New Zealand GEOS schools would probably lose students rapidly “now that the reputation of GEOS among the international agents who supply the New Zealand schools with students has been compromised”.

The possible New Zealand closures follow the recent deregistration by the Qualifications Authority of two private Auckland training centres for non-compliance.

Authority records show the agency has long-running concerns with GEOS New Zealand’s financial management, although it was noted in the last audit at the end of 2008 that the company had made progress addressing the concerns.

According to the company’s annual financial statement, the New Zealand branch of GEOS lost almost $900,000 in 2008 after making a profit of nearly $1.2 million in 2007.

English New Zealand chairman Rob McKay said that, even if the New Zealand schools did not close, their reputation would be damaged. GEOS was one of New Zealand’s biggest private schools teaching English to foreign students.
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GEOS’ head office in Tokyo said its schools outside Australia would operate as usual, but admitted the closures might affect its reputation and student numbers.

http://www.stuff.co.nz/dominion-post/national/3286808/Uncertainty-over-language-schools-fate

The Victorian Registration and Qualifications Authority (VRQA) says it will protect the 2,300 students affected by the possible closure of a number of English language schools across Australia.

Nine companies associated with GEOS, which operates the schools in Melbourne, Sydney, Adelaide, Perth, and Brisbane, went into voluntary administration late last week.

The authority discovered that directors of GEOS have been diverting revenue from its Melbourne business, to support the operations of its other companies both in Australia and overseas.

A decision is expected to be made today on the schools’ future and Lynn Glover, the director of the VRQA, says the students and 400 staff will be looked after.

“If a decision is made by the administrators for the college to close, all overseas students will be protected by the tuition insurance scheme,” she said.

“This will mean that students will be placed in suitable alternative courses, here in Melbourne, at no additional cost and the VRQA will be supporting that process.”

http://www.abc.net.au/news/stories/2010/02/01/2806552.htm

The voluntary administrators of eight English language schools say that the schools will not reopen because of the financial situation.

Justin Walsh and Adam Nikitins of Ernst & Young say they are working with the federal department of education and state government departments to find arrangements for the 2300 international students.

The administrators were continuing to investigate the nine companies operating under the GEOS name and hope to provide a further update on Wednesday, Ernst & Young said in a statement on Monday.

“We’ve very quickly worked through the options to keep the schools open, but were unable to do so,” Mr Walsh said.

“That included speaking with the Japanese parent.”

GEOS, which had schools in Melbourne, Adelaide, Sydney, Cairns, Gold Coast, Perth and Brisbane, is the local subsidiary of the Tokyo-based language teaching company of the same name.

“Funds weren’t forthcoming” from GEOS, Mr Walsh said.

GEOS’s media relations manager was not immediately available for comment.

The students, from 20 different countries including Brazil, Colombia, South Korea and Turkey, and 390 employees were being informed at meetings on Monday afternoon.

“We’re working with federal government to minimise the impact on the students,” Mr Walsh said.

http://news.smh.com.au/breaking-news-business/eight-english-schools-wont-reopen-ey-20100201-n8nn.html

Eight collapsed language schools owned by the Japanese-based GEO Group will remain shut, leaving the places of 2,300 students up in the air and 390 employees out of work.

Administrators Justin Walsh and Adam Nikitins of Ernst & Young said in a brief statement released yesterday that the financial position of the schools, which were shut down last week, was such that they could not continue to trade.

“We are continuing to investigate the financial affairs of the companies and will report to key stakeholders in due course,” the pair said.

Total debts owed to students and other creditors could be as high as $10 million, according to media reports.

The colleges are located in Melbourne, Sydney, Adelaide, Perth, Brisbane, Gold Coast and Cairns, with the largest number of students based in Melbourne (530 students) and Sydney (500 students).

Australia’s international student system contains consumer provision protections which means students at a collapsed school will be given places at other institutions.

The administrators said they will now work with “the Federal Department of Education, Employment and Workplace Relations and relevant state government departments in relation to alternative arrangements for students”.

“Government agencies will also be holding information meetings for affected students in relation to consumer protection and alternative arrangements from Wednesday this week.”

GEOS Oceania is part of the GEOS Group, which operates language schools in North America, Europe, Singapore, South Africa, Korea and New Zealand.

Most of the schools in Australia have been running since the 1990s, while the Brisbane campus was established in 1987.

GEOS, which stands for Global Education Opportunities and Services, was founded in Japan in 1973 by Tsuneo Kusunoki.

The company’s global expansion has been wound back somewhat in the last few years, with 10% of the company’s Japanese schools shut down in 2007 and centres in Vancouver and London closed in 2008.

Troubles at the GEOS college in Melbourne appear to have been mounting in recent months. According to The Age, the Victorian Registration and Qualifications Authority had become concerned about GEOS following a financial audit.

The collapses are another blow to Australia’s beleaguered international education system, which has seen a string of high-profiled failures in the last 12 months.

Sterling College and Melbourne International College went under in July, while four schools – Meridian International School, Meridian International Hotel School, International Design School and International College of Creative Arts – with a total of 13 campuses, collapsed in November.

http://www.smartcompany.com.au/professional-services/20100202-collapsed-geos-language-schools-will-not-re-open-as-debts-hit-10-million.html

THE collapsed GEOS English language college network was permanently shut yesterday after administrators discovered the Japanese owners had left it with no money to keep going.

Students and staff are owed more than $10 million in pre-paid fees and entitlements.

Worst-hit are about 1000 students who had paid GEOS for homestay accommodation and who could now face eviction.

GEOS student Joachim Adam from Germany has already been told by his landlady in Melbourne to immediately pay his weekly rent of $220 dollars or leave, even though he has already paid all his rent to GEOS.

“I must pay by this evening or I must go,” he said.

Administrator Justin Walsh of Ernst and Young said remaining funds “are vastly insufficient to continue trading”. GEOS was put into administration by its Japanese parent on Friday.

The Australian understands students, landlords and agents could be owed about $10 million, while the entitlements of the nearly 400 staff also run into the millions.

Student fees are protected under an assurance scheme run by peak body English Australia in which students are entitled to be placed with other colleges.

English Australia said it was confident of being able to place all students, but some are already regretting they chose to study in Australia.

Mario Galindo, a 39-year-old university tutor from Colombia, paid almost $7000 for a ten-month course to improve his English. He has been left stranded with two months tuition owed.

“I thought this was a serious country . . . but now I think it was a mistake,” Mr Galindo said.

Pina Vigo of West Preston in Melbourne was yesterday showing her newly arrived nephew, Filippo Zilio, from Italy, where his GEOS college was, only to find it closed. Mr Zilio, 19 had paid for a month’s study.

“It stinks,” Ms Vigo said. “How can they do this to the students? How can the government not know?”

GEOS has schools in NSW, Queensland, South Australia, Victoria and Western Australia.

http://www.theaustralian.com.au/news/nation/collapsed-college-owes-students-10m/story-e6frg6nf-1225825684175