Clinton Foundation,Yale Israeli Jew,,NY Stock Exchange Fraud Aid Chinese Child Abuse Ring
https://asia.nikkei.com/Business/Companies/Kindergarten-abuse-scandal-raises-questions-about-China-IPO-rush
Kindergarten abuse scandal raises questions about China IPO rush
No outsiders on RYB Education board before launch of NYSE share sale
DEBBY WU, Nikkei staff writer
Chinese special police stand guard at RYB Education Kindergarten in Beijing on Nov. 23 after parents accuse the preschool of abusing their children. © AP
TAIPEI -- A child-abuse scandal involving a prominent Beijing kindergarten is raising questions about whether China's initial public offering rush has become too heated to allow sufficient screening of candidate companies.
Parents last week alleged that their children at a preschool run by RYB Education, which listed on the New York Stock Exchange on Sept. 27, were poked with needles, fed unidentified pills and forced to go naked. China's official Xinhua News Agency reported on Saturday that a teacher had been detained by police in connection with the case. RYB subsequently issued a statement of apology, saying it was firing the teacher. It said it was cooperating with the authorities in their investigations and would provide doctors and psychologists to treat victims.
RYB, whose shares jumped 40% on the first day of trading after its $144.3 million IPO, is one of 15 Chinese companies that have listed in New York this year, the most in six years, according to financial data provider Dealogic. The gold rush has created several new billionaires.
RYB investors did not strike it quite so rich, but Ascendent Capital Partners, a China-focused private equity group founded by two alumni of Yale University's MBA program, pocketed $42.6 million by selling off about a third of its holding in the preschool operator during the IPO.
RYB shares however opened 41.5% lower on Nov. 24 when trading resumed after the Thanksgiving holiday in the U.S., even though the company announced before trading started that it would spend up to $50 million over the next year buying back potentially more than a third of the stock it had sold in the IPO two months earlier.
Ascendent, which bought a 47.1% stake in RYB in late 2015, is now the company's biggest shareholder. Soon after its investment, news broke that five teachers had been detained at a RYB kindergarten in northeastern Jilin Province on allegations they had pricked childen with needles; a year later, four were sentenced to prison, according to Xinhua.
"The education industry in China has grown fast and remains an attractive investment target," said Peter Fuhrman, chairman and chief of China First Capital, an investment bank based in Shenzhen active in private equity. "This high growth has perhaps sometimes come at the expense of the core fundamental: gaining the necessary expertise, focus and procedures to assure child safety."
Common backgrounds
Aside from the Ascendent partners, Yale School of Management was also the common factor that brought RYB together with Joel Getz, the school's senior associate dean for development and alumni relations. Getz declared in a filing with the U.S. Securities and Exchange Commission on Aug. 28 that he would join RYB's board as an independent director, just a month before the company listed on the NYSE. Getz is not believed to have been previously involved in Chinese education though he visited universities in the country a number of times on Yale's behalf.
Speaking with Nikkei Asian Review, Getz, who was previously director of development for the William J. Clinton Foundation and president of the Mayor's Fund to Advance New York City during Michael Bloomberg's term in office, declined to respond to questions and simply pointed to RYB's own statement on the Beijing scandal. "I think it is best not to comment further until the investigation is completed," he said in a subsequent email.
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