Private coaching institute FIITJEE has blamed "mismanagement and exploitation" by managing partners for the closure of various centres in Delhi NCR and other regions of the country.
This comes after the institute, which has 73 study centres across the country, faced en masse resignations by staff in at least eight to ten centres.
In an official statement, the institute said it has not closed any centre as part of its own decision. "Overnight desertion of the centre by the centre managing partners, along with the entire team suddenly, is the only reason for this force majeure type of condition," it added.
One of the centres affected by this closure is FIITJEE’s East Delhi centre situated in Laxmi Nagar. The centre, which has over 500 students, wore a deserted look after the Delhi Police sealed the centre’s gate following complaints by students and parents.
According to the only staff member present outside the centre, it was shut down on Tuesday due to a staff crunch. "The company was not able to pay salaries to teachers as it was facing a financial problem," he said.
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He added that the management is working to recruit more teachers and staff and may reopen centres in a month or two.
Calling the closure temporary, the institute confirmed that company officials are working to resume operations at all locations within a reasonable time.
While the Delhi Police has launched a probe after many parents accused the East Delhi centre of fraudulent practices and mismanagement following its abrupt shutdown, FIRs have also been registered against the FIITJEE board and managing partners of two centres in Uttar Pradesh’s Noida and Ghaziabad.
A similar scene was witnessed at FIITJEE’s Kalu Sarai centre, which also serves as the main branch in Delhi. A security guard outside the centre commented that while this centre is still running, many parents assembled there to raise complaints on Friday and Saturday.
Commenting on the situation, a parent of a Class 11 student who studies at the Laxmi Nagar centre said, "We found that all staff members resigned due to non-payment of pending salaries and joined other institutes."
"It is so painful and scary to all of us since our hard-earned money and the careers of our children are under threat," the parent added.
Another parent said students have received WhatsApp messages from the faculty at the Noida Sector 62 campus, informing them that they have joined Aakash’s "Invictus Program" and classes will now resume under Aakash Institute’s management.
"At the Noida centre, we have not received our salaries for three months in the last calendar year, yet we never let anything overshadow the classes," the message reviewed by Business Standard read.
The message also claimed that the company is still not providing funds for routine expenses. "So, we have collectively resigned from FIITJEE services and joined Aakash Institute’s newly launched IIT-JEE (Advanced) wing—Invictus," it added.
While FIITJEE did not respond to Business Standard’s queries till the time of going to print, the institute, in a public statement, said recent events have brought about speculation and misinformation regarding its operations and management.
"The corporate office at Delhi only follows the advice of the managing partners in order to grow the business, and the concerned officials of FIITJEE Corporate Delhi used to provide them with complete support as per their requisitions and instructions based on their projections for business growth at their respective centres," the institute said.
Blaming centre heads and managing partners, FIITJEE added that the former’s actions compelled the corporate management to usurp the entire collections, causing significant losses.
"Owing to mismanagement and exploitation by the managing partners, FIITJEE’s financial situation worsened in January 2024, with the group chief financial officer (CFO) forecasting that the company might run into an operational cash crunch within six months."
FIITJEE claims that many managing partners did not take any action when asked to optimise excess manpower, improve work culture, and follow the outlined strategy for bouncing back from the situation so that the respective centres could start operating without causing further losses.
"Even this situation was exploited by some managing partners to gain unfair advantage. Rather than working on proper optimisation, they halted admissions and disrupted regular processes. This exacerbated the financial crunch," FIITJEE said.