NEW YORK, NY / ACCESSWIRE / July 7, 2022 / Pomerantz LLP is investigating claims on behalf of investors of First High-School Education Group Co., Ltd. ("FHS"or the "Company") (NYSE:FHS). Such investors are advised to contact Robert S. Willoughby at [email protected]or 888-476-6529, ext. 7980.
The investigation concerns whether FHS and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices.
On or around March 11, 2021, FHS conducted its initial public offering ("IPO") of 7.5 million American Depositary Shares ("ADSs") priced at $10.00 per share. Soon after the IPO, media reports stated that Chinese policymakers had proposed stricter regulations to rein in the for-profit education industry, such as regulations aimed at enhancing teacher quality, limiting fee scams, reducing market abuse, and reducing the stress that for-profit educational companies had placed on students in the Chinese educational system.
On May 12, 2021, news reports revealed that the impending government crackdown on for-profit educational companies in China would be much more drastic and far reaching than previously publicly known. Sources stated that anticipated rules would include measures such as banning on-campus tutoring classes, prohibiting tutoring services during weekend hours, and the imposition of industry-wide fee limitations.
On May 14, 2021, China's state council announced that it would further tighten regulations on compulsory education and training institutions with new rules set to take effect on September 1, 2021.
On July 23, 2021, China unveiled a sweeping overhaul of its education sector, banning companies that teach the school curriculum from making profits, raising capital or going public. These drastic measures effectively ended any potential growth in the for-profit tutoring sector in China.
On July 26, 2021, FHS issued a press release announcing that the Company "will follow the spirit of the Opinion and comply with all relevant rules and regulations in providing high school education services."
In a series of disclosures beginning on September 28, 2021, FHS reported, among other things, disappointing financial and operating results due to the impact of the regulatory crackdown on China's for-profit education sector; the resignation of the Company's Chief Financial Officer; the dismissal of the Company's auditor, KPMG Huazhen LLP; the receipt of a letter from the New York Stock Exchange ("NYSE") stating that the Company was in non-compliance with the NYSE's listing requirements because its total market capitalization and stockholders' equity had fallen below compliance standards; and that the Company would be unable to timely filed its annual report with the U.S. Securities and Exchange Commission.
By May 10, 2022, FHS ADSs closed below $1.00 per share, representing a decline of more than 90% from the offering price.
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SOURCE: Pomerantz LLP