Careers Australia enters voluntary administration, declares no classes

Careers Australia entered voluntary administration, which left classes for 15,000 students cancelled. Fourteen campuses of one of the country’s biggest vocational education providers were affected.

All staff members received a letter from voluntary administrators David McEvoy and Martin Ford of PPB Advisory on Thursday. ABC's 7.30 program was able to obtain a copy.

McEvoy and Ford explained they do not currently have sufficient funds available for payroll as well as for other costs that would allow them to keep on trading the Group on a business as usual basis. "Accordingly, we hereby confirm you are stood down effective May 25, 2017 whilst we undertake an urgent assessment of the Group,” they wrote.

No classes

A text message was sent to students saying all activities of Careers Australia Group were suspended, and that there were no classes and workplaces effective immediately. It said more details would be provided.

Careers Australia at one time obtained hundreds of millions of dollars in funding from the federal government. But the company was told this week that its students were not eligible for loans under the Turnbull government’s recently announced scheme.

McEvoy admitted that the decision by the Federal Department of Education and Training not to allow Career Australia's application to become a VET student loan scheme approved course provider has affected its operations. Careers Australia is owned by private equity firm White Cloud Capital.

Additionally, McEvoy said they are working closely with management and key stakeholders to decide whether Careers Australia would be sold or restructured. “Regrettably, we have had to suspend all classes and stand down employees while we assess all options available to the business moving forward,” Sydney Morning Herald quotes him as saying.

There were previous claims that the company was performing door-to-door selling of its courses to those were not able to finish them. Career Australia was accused of saying the courses were free when in reality, students racked up a debt to the government.

After an investigation by the Australian Competition and Consumer Commission, the company admitted to "false or misleading representations and engaged in unconscionable conduct" last year. It was forced to cancel 12,130 student enrolments and repaid the federal government at with at least $44.3 million.

Careers Australia was also accused of cold calling and using employment websites to get people's contact details without them knowing. The company has denied these allegations.

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