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New coaching institute accuses JK Shah Classes of monopolistic practices

February 8, 2022
-Dipta Joshi

JK Shah Classes (JKSC, estb. in 1984 by Prof. Jinendra K Shah), the Mumbai-headquartered private coaching institute well-known for offering tutoring in commerce subjects, chartered accountancy (CA) and company secretaryship (CS), has been accused of using strong-arm tactics to intimidate former employees who quit the institute to promote their own coaching institute.

The institute’s former chief executive officer, Ashish Shah (a rank holder CA, a CS and Level 3 CFA candidate) and seven other JKSC teachers had resigned in September 2020 to set up Ednovate Education Pvt. Ltd. in March 2021.  

JKSC (JK Shah Education Pvt. Ltd) provides coaching to 30,000 plus students annually at its 67 branches across India and one in Dubai. The institute lists 59 All India rankers in the recent CA finals exams (November 2020, January and July 2021) as its achievements.

In comparison, Ednovate, which was established to solve the pain points of students and to provide an end-to-end ecosystem to CA students, has garnered 2,500 students within a short span of 11 months. The company which plans to launch offline classes in the future currently offers online coaching.  

Ednovate founders, however, allege since their exit from JKSC, Prof. Shah has been purposefully implicating them in false and frivolous cases and harassing them mentally. The Ednovate team also accuses JKSC of creating fear and panic amongst the students by propagating false stories of Ednovate’s imminent closure.

While the JK Shah Classes website advertises its highly qualified faculty, it has set stringent rules for all faculty members to comply with. Teachers who aren’t allowed holidays face penalties ranging from Rs.5000 to 50,000 for starting lectures late, finishing lectures early, not conforming to the stipulated dress code, taking 10-minute plus tea breaks or a day off on the death of anyone other than close family members.

While teachers at the institute were unhappy with the institute’s adverse working conditions, the situation worsened during the lockdown period when teachers did not receive their remuneration on time. Former faculty members allege JKSC, which pays teachers by the hour, was reluctant to make payments to teachers in the absence of physical classes since lectures consisted of pre-recorded videos created by teachers.

“While working conditions were always adverse, what is really disheartening is the premeditated bullying and open threats we are receiving to pressurise us into shutting shop. JKSC has filed cases and sent notices to us. Our attempts to resolve the issue through consent agreements are being deliberately thwarted by JKSC. The institute’s monopolistic attitude is a direct violation of our fundamental right to earn a living through our profession (coaching CA aspirants),” says an Ednovate spokesperson who did not want to be identified for fear of reprisal by JKSC.

In November 2020, the former employees agreed to maintain a four-month cooling period (until February 2021) before establishing Ednovate or employing JKSC’s former employees in the new establishment. However, JKSC soon filed a case alleging breach of the agreement which was dismissed by the court (February 16, 2021). In January 2022, a second attempt at a settlement between the two parties included one-sided terms like closing down Ednovate, transfer of Ednovate students to JKSC and professors joining JKSC once again. The Ednovate team alleges JKSC threatened to implicate the team in false cases if these terms were not complied with.  

However, JKSC, which is on weak ground, alleges some of its former employees at the Raipur and Jaipur centers siphoned student fees which were collected in cash from the students but not accounted for. “JKSC was made to believe massive discounts were offered to students at the Raipur and the Jaipur branches, however, we discovered the fraud when more than 300 students from these centers began asking for fee receipts for the cash payments they made. We have since conducted a forensic audit at these centers and found a sum of Rs 1.60 crore was collected but not deposited with the company’s account,” says a member of JKSC’s legal team.

JKSC says the fraud took place between January 2019 and November 2020. It has filed a first information report (FIRs) against the former center head of Jaipur some days back and says it will continue to file more FIRs as and when they discover more discrepancies. 

Meanwhile, Ednovate is gearing up to approach the courts to fight against the strong-arm tactics being used by JKSC and for their fundamental right (Article 19 (1) (g)) to practice any profession or to carry on occupation, trade or business.

Also read: 

Chartered Financial Analyst: Rising demand for finance professionals

“Enrolment in CA courses growing after dip of 60% in 2020-21”

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