Department pulls plug on Educor colleges
• Damelin among the household names that will shut at year end
The department of higher education’s director-general, Nkosinathi Sishi, cancelled the registrations of Damelin College, CityVarsity, Lyceum colleges and Icesa City Campus on Friday, saying they had not submitted annual financial statements in 2021 or 2022 or complied with the law.
Thousands of students will need places to study from next year, as the institutions will have to close by the end of 2024.
These institutions are owned by Pinetown-based Educor, which says it is the largest provider of private tertiary instruction in SA, with much of it distance based. Some Damelin campuses and Icesa, which is based in Pietermaritzburg, also offer matric courses.
Educor, which has had financial difficulties since at least 2020, competes with JSE-listed firms AdvTech and Stadio. Lyceum was founded in 1917 and Damelin in 1943.
According to a notice published in the Government Gazette on Friday, Damelin, CityVarsity, Lyceum and Icesa failed to submit their 2020 and 2021 annual financial certificates and annual reports.
These documents are legally required and must include the financial status, a list of assets, staffing levels, achievements, employment equity plans, longterm objectives, details of courses and student numbers and how student records are kept.
The gazette said the tertiary providers “failed to discharge the responsibilities of a private higher education institution” as outlined in regulations.
According to the regulations for the registration of private high education institutions, which fall under the Higher Education Act, once an institution has been deregistered, it needs to tell all students within 14 days and provide them with a transcript of their academic achievements. It must reimburse students who cannot access the education they have paid for.
Then the colleges “must make adequate arrangements for affected students to complete their programmes at a comparable public or private institution”.
The institutions have to cease operating “before or at the end of the academic year”.
CityVarsity, which provides courses in film, acting and sound engineering; Damelin, which provides long-distance and inperson degrees; and correspondence college Lyceum will not be required to close their doors immediately though.
Higher education minister Blade Nzimande’s spokesperson, Veli Mbele, told the Daily Maverick recently that all Educor institutions were “under investigation” and the department had received many complaints from Damelin students.
Mbele had not responded to Business Day’s requests by the time of going to print on Sunday.
The department had threatened to deregister Damelin in 2022 for not producing its 2020 financial statements.
Daily Maverick also reported last month that the Council on Higher Education, a government quality assurance body, had withdrawn accreditation for nine Lyceum diplomas, and that seven Damelin diplomas, one Damelin higher certificate and one degree could not enrol new students pending the outcome of a court case.
In early 2020, Educor sent letters to staff saying it would halve its 1,552 permanent employees as it had much lower student numbers and a lower sales budget. Meanwhile, competitor Stadio has been growing student numbers every year.
More recently, some Educor academic staff were not paid in November or December. The SA Federation of Trade Unions issued a statement on December 24 saying that it was “utterly disgusted by Damelin and its sister colleges for nonpayment of salaries to their employees ... across the country, which translates into denying them a merry Christmas”.
Customer service website Hello Peter has many recent posts from lecturers or staff who say they have worked and not been paid or paid in full. Angry students have posted complaints that they cannot access study material, get hold of Damelin or access refunds.
The Damelin customer care phone number advertised on its website no longer works.
It is not clear who is in charge of Educor. According to LinkedIn, Leo Chetty is the chair, but he said on Sunday he knew nothing of the deregistration before hanging up on Business Day’s journalist.
He has resigned as director of most, but not all, of the Educor subsidiaries, according to information provided by the Companies and Intellectual Property Commission (CIPC). Louise Nair was recorded in March by the department of higher education as CEO, but it appears she may have stepped down years ago. Julian Kannigan, a colleague of Nair and Chetty at an investment firm they work at, seems to be the owner of Educor, according to the CIPC, but could not be reached. Emails to an Educor staff member were not answered.