(Bloomberg) -- RYB Education Inc. said a foreign teacher was arrested for alleged misconduct against a child at one of its kindergartens in eastern China, sparking a wave of backlash against the New York-listed company on social media.
The teacher, who is from Colombia, slipped his hand under a quilt of a student at the kindergarten in the coastal city of Qingdao, the Beijing-based preschool operator said in a statement on its website. The January incident was uncovered after the child’s parents reported it and the school reviewed surveillance tapes. Qingdao police said the teacher has been charged with indecency.
The news triggered a flood of posts from concerned parents on Chinese social media platforms, with some demanding the preschool be shut down and others calling for the teacher to be deported. It prompted about 22,000 comments on Global Times’s Weibo account alone as of late Friday afternoon Beijing time.
The company’s American depositary receipts fell as much as 8% Friday to the lowest intraday level since January. RYB, which listed ADRs on the New York Stock Exchange in 2017, is down more than 68% from its initial public offering price.
It’s the second time RYB has been hit by a claim of abuse at one of its Chinese operations, with a teacher at a kindergarten in Beijing fired in 2017. Allegations surrounding that incident spread like wildfire on the Chinese internet, fueling anxiety over the country’s fledgling private education industry.
Inadequate Oversight
The rise of China’s increasingly affluent middle class has stoked demand for privately run preschool and kindergarten providers such as RYB. But the consequent rapid growth has also sparked concerns about inadequate oversight.
China’s state media also weighed in on the latest incident involving RYB.
China Daily said on its Sina Weibo account that “repeated cases” of misconduct by foreign teachers prompted questions about their qualifications. The official newspaper called for more stringent reviews and for companies that hire unqualified teachers, or those with criminal records, to be punished.
RYB said the child involved had been fully examined by a hospital and had no physical injuries. In its statement, the company said its hiring processes meet legal requirements and that it has a policy prohibiting foreign and male teachers from interacting with children alone. RYB removed the head of the Qingdao kindergarten and the teacher on duty for the class.
“We apologize for the harm and public opinion caused by this incident to our children’s families,” RYB said in the statement.
After the 2017 incident at the RYB school in Beijing, a string of other claims of abuse at Chinese child care facilities coursed through Weibo and WeChat -- China’s main social media platforms -- spurring the education ministry to say it would conduct a special inspection of kindergarten management across the country.
Upgrade Surveillance
Back then, RYB said it would send in an “elite education management team” to ensure normal operations at the Beijing preschool and to stabilize the faculty. It said it would upgrade security surveillance systems for all its Chinese schools.
RYB’s ADRs plunged 31% in November 2017, in the wake of the first allegations, which came just a few months after they were listed. The shares have yet to return to the debut levels, with $258 million in market wiped out last November when China’s government adopted a new policy prohibiting listed companies from investing in for-profit kindergartens using funds raised in the stock market.
Founded in 1998, the company describes itself as a “quality preschool for infants” up to 6 years of age. As of the end of last year, RYB operated a network of more than 1,400 directly owned and franchised kindergartens and play-and-learn centers throughout 30 provinces and municipalities in China.
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