ChinaCast Education
| Company type | Public (formerly listed) |
|---|---|
| Industry | Higher education, Digital learning |
| Founded | 1999 |
| Founder | Ron Chan Tze Ngon |
| Headquarters | Hong Kong , China |
Area served | People's Republic of China |
| Products | Post-secondary academic programs, e-learning solutions |
ChinaCast Education Corporation operates as a profit-driven provider of higher education and digital learning solutions within the People's Republic of China, with its headquarters situated in Hong Kong. Established in 1999, the enterprise delivers post-secondary academic programs primarily through its 80% ownership of the holding entity controlling the Foreign Trade and Business College (FTBC) affiliated with Chongqing Normal University. Its e-learning offerings extend to universities, K-12 educational institutions, government bodies, and corporate clients via a comprehensive satellite broadband network spanning the nation. ChinaCast entered the NASDAQ market in 2007 but was subsequently removed in 2012 following internal governance conflicts and accusations of improper conduct.
History
The company was originally founded in 1999 by Ron Chan Tze Ngon under the name ChinaCast Communications Limited, securing Series A venture funding from notable investors such as Hughes Network Systems and Intel Capital.
By May 2004, it had rebranded to ChinaCast Communications Holdings Limited (CCH) and successfully completed an initial public offering on the Singapore Stock Exchange. In 2006, CCH was acquired through a reverse merger by Great Wall Acquisition Corporation, a US-based Special Purpose Acquisition Company, resulting in its delisting from Singapore’s exchange. The acquiring entity adopted the name ChinaCast Education Corporation and commenced trading on the NASDAQ Global Market in 2007.
In April 2008, ChinaCast expanded its portfolio by purchasing an 80% interest in the holding company overseeing FTBC at Chongqing Normal University. Although incorporated under Delaware jurisdiction and headquartered in Hong Kong, all operational assets remain situated within mainland China.
By early 2011, the firm’s market valuation stood near US$285 million. Its business operations encompassed three physical education centers alongside its digital learning platforms.
Legal challenges and delisting
Starting in late 2011, ChinaCast encountered substantial difficulties that culminated in its removal from NASDAQ by May 2012.
In December 2011, allegations of insider trading were directed at board member and shareholder Ned Sherwood by the company’s board; Sherwood contended these claims were part of a strategy to oust him amid disputes over a potential corporate sale. He responded by initiating legal proceedings in Delaware courts and sought election to the board. Following an election overseen by IVS Associates and an accounting firm, Sherwood secured control of the board and facilitated the dismissal of Chairman Chan Tze Gong.
Simultaneously, Sahm Adrangi from Kerrisdale Capital Management, a short-selling firm, accused ChinaCast of financial misrepresentation intended to attract investment capital and deceive Chinese regulatory authorities. Adrangi highlighted that an education facility claimed to serve approximately 1,200 students was largely unoccupied.
In 2012, founder and CEO Ron Chan Tze Ngon faced allegations of diverting roughly US$120 million from company funds since 2008 while obstructing annual audit processes. He was also implicated with Harmony, a competing Meyers service provider, leading to his removal as CEO that year. By 2014, litigation asserted theft totaling US$150 million. In 2013, the U.S. Securities and Exchange Commission prevailed in court against Chan for "systematic plundering" of company assets, resulting in a US$49 million judgment issued by a Manhattan federal court. The Ninth Circuit Court later affirmed that ChinaCast could bear responsibility for its CEO’s misconduct, permitting further legal action.
In 2016, ChinaCast sought bankruptcy protection to shield itself from a $65.8 million investor judgment while pursuing claims of embezzlement against Chan.