Larry Chen, the founder, chairman and chief executive of Gaotu Techedu, has lost his billionaire status as China imposed a regulatory overhaul on the country’s $100bn private education sector.
The Chinese authorities released new regulations banning companies to teach school curriculums in order to make profits, raise capital, or go public, Bloomberg reported today.
Chen, a former school teacher who became one of the world’s richest people, is now worth $336m, according to the Bloomberg Billionaires Index, after shares in his online-tutoring firm plunged by almost two-thirds in New York trading on Friday.
“Gaotu will comply with the regulations and undertake social responsibilities,” Chen said on his Weibo – China’s equivalent of Twitter – on Saturday night.
Chen’s wealth has plunged by more than $15bn since late January as Gaotu’s stock tumbled, but he is not the only Chinese private education provider hit by the latest sweeping overhaul.
Zhang Bangxin, chief executive of TAL Education Group, has shed $2.5bn in wealth after the company’s shares dived 71% in New York on Friday.
Yu Minhong, chairman of New Oriental Education & Technology Group Inc., lost his billionaire status as he has shed $685m in wealth, leaving him with a stake value of $579m after the firm dropped 54%
Both companies stated that they will comply with the new rules.