(Yicai Global) Sept. 24 -- Shanghai Xinnanyang Only Education and Technology clarified today that Nanjing Only Qihang Extracurricular Education and Training Center, which went bankrupt yesterday due to poor management, was a former partner with which it now has no equity or cooperative relationship.

Zhou Guoqiang, who controls Only Qihang, issued a letter of apology on the Nanjing-based firm’s WeChat account late yesterday, saying it had used up the CNY5 million (USD773,500) it had raised since opening in 2014. He also had personal debts of CNY8.25 million (USD1.28 million), the borrowing limit, and so was unable to continue operating the firm.

Only Qihang is Only Education’s former partner in Nanjing, the well-known Shanghai-based education company said today, adding that it terminated their collaboration in September 2020, and has not had any equity ties since. Only Qihang’s shareholders are not employees or former employees of Only Education.

China introduced a series of policies in July to ease the burden of excessive homework and off-campus tutoring on students in compulsory education. As a result, several well-known institutions, including Wall Street English, have since gone bust.

The measures included strengthening supervision of off-campus teaching institutions, prohibiting subject teaching centers from organizing courses for students during statutory holidays, and banning such firms from listing and fund-raising.

Only Education is a company under Shanghai Jiao Tong University, one of China’s top universities. Its business covers kindergarten through 12th grade, vocational education and overseas study training. The firm went public on the Shanghai Stock Exchange through a backdoor listing in 2014.

Shares of Only Education [SHA: 600661] did not fluctuate much today, closing 0.7 percent higher at CNY9.50 (USD1.47) each. That gave the firm a market cap of about CNY2.7 billion (USD417.4 million). The broader Shanghai Composite Index ended down 0.8 percent.

Only Education’s revenue rose 14.8 percent to CNY902 million in the first half of this year, with a net profit of CNY169 million, versus a net loss of CNY80 million in the same period of last year due to the Covid-19 pandemic, according to its latest earnings report.

Editor: Peter Thomas