(Yicai Global) Aug. 13 -- Wall Street English, one of the world’s leading English language educators, is preparing to declare its China business bankrupt next week, as the country’s recent veto on extracurricular classes turns out to be the final nail in the coffin for the firm already badly hit by the Covid-19 pandemic, company insiders told Yicai Global yesterday.

The head of sales in the north China division has notified the directors of its branches that the company is about to go bust and has told them to get their employees to start resignation procedures as soon as possible, the source said.

Wall Street English has yet to comment.

The 49-year-old firm, first set up in Italy using founder Luigi Peccenini’s unique language teaching techniques, has recently shut 60 percent of its schools in China as the Covid-19 pandemic discouraged in-classroom teaching.

It was then hit with a CNY36.5 million (USD5.6 million) fine in June for false advertising and fraud. The company exaggerated the number of classes offered and fabricated course registrations, according to the State Administration of Market Supervision.

Last month’s new clampdown by regulators on extra-curricular classes in a bid to reduce the burden on the country’s school kids is the final straw that has broken the camel’s back, a company insider told Yicai Global.

Educators are not allowed to offer courses to students from kindergarten to 12th grade after school hours, on public holidays, weekends and during the holidays, regulators said in a set of guidelines issued on July 24 with the aim of reducing the study workload during compulsory education years. Adult and vocational education are likely to take off now, industry insiders said.

Editor: Kim Taylor