– Dipta Joshi (Mumbai)

Mahesh Shetty: timely exit

In recent times following cancellation and re-writing of NEET-UG 2026, a single paper exam for determining admission into India’s 824 medical and 330 dental colleges, the country’s massive test prep aka coaching industry with a reported aggregate sales revenue of Rs.58,000 crore has attracted a great deal of attention.

There’s widespread suspicion that coaching schools, which widely advertise the number and ranks obtained by their students in public entrance exams in full-page advertisements in national dailies,  tend to suborn question paper setters, transporters and/or assessors to give their students unfair advantage in public examinations such as NEET-UG. Over the years, several test prep enterprises have transformed into large business corporations with bricks-n-mortar centres countrywide, some clocking annual revenue of over Rs.1,000 crore.

Against this backdrop, the abrupt closure on July 10 of 33 centres of M.T. Educare Ltd (estb.2006) whose classes operated under the popular brand name Mahesh Tutorials  across Maharashtra, has shocked 2,500 enrolled students and parents statewide. Parents and enrolled students scrambling to get their huge sums (Rs.1 lakh onwards per year) back from the company are doubly shocked that despite being one of India’s largest markets for private coaching classes, Maharashtra has no regulatory law to govern them and protect students’ interests.

Founded in 1988 by edupreneur Mahesh Shetty, the company began as a modest coaching class tutoring students in maths and science. Over three decades, it expanded to over 200-plus centres nationally and also diversified into tutoring school-leavers for IIT-JEE and NEET-UG. To mobilise capital for its bricks-n-mortar centres, the company went public in 2012 and raised Rs.99 crore through an IPO (initial public offering).

In 2018, Zee Learn Ltd, an education company promoted by television media baron Subhash Chandra, acquired a majority stake in MT Educare. Two years later, “irreconcilable differences” between the old and new management resulted in Shetty resigning from the company.

The company’s financial troubles reportedly began soon after MT Educare’s bricks-n-mortar centres shut down for almost a year suffering huge losses during the Covid-19 pandemic. Moreover, Zee Learn, which also runs its KidsZee preschools chain, Mt. Litera Group of primary-secondaries, and Robomate Digital Learning, failed to convert its school students into MT Educare swotters.

“Zee Learn assumed control of the company and as I no longer held a majority stake, my ability to influence key decisions became increasingly limited. It also became evident that the two organisations were guided by very different cultures and philosophies. Rather than continue in a direction that was no longer aligned with my vision and values, I made the conscious decision to step away,” recalls Mahesh Shetty. In 2022, the National Company Law Tribunal (NCLT) admitted insolvency proceedings against MT Educare.

Following the closure of MT Educare’s last serving test prep centres in Maharashtra last month, parents have been informed that Arihant Academy will accommodate Mahesh Tutorials’ students. But they were not given the option of a fees refund. Parents are now demanding government intervention to get refunds and ensure accountability.

“We tried reaching the MT Educare head office but were not allowed to meet anyone. I am hopeful the government will intervene at the earliest considering the issue has wider public interest implications. However, the response from the Minister for School Education, Dadaji Bhuse, has been negative and surprising. He says the matter is beyond the purview of the government as it is a private coaching company,” says Pradeep Magare, a parent and the Founder-President of Sankriti Jeevan Aadhar Foundation, which is pursuing this case with the state government’s education ministry.

The minister’s response is accurate as the state government has not enacted specific legislation to monitor and penalise erring private coaching enterprises. Classified as private commercial entities, coaching schools are outside the ambit of laws governing education institutions and thus remain largely unregulated on fees, quality of faculty etc.

The Union government, too, has mooted ‘Guidelines for Registration and Regulation of Coaching Centres, 2024’ to curb malpractices and introduce tuition fees and pro-rata refund policies for mid-course exits. After the recent NEET-UG scandal, the Maharashtra government promised it would table a law in the monsoon session (June 22-July 10) to regulate coaching schools, but the bill remains pending.

The latest news is that aggrieved parents have filed a complaint with the Economic Offences Wing (EOW) alleging fraud and breach of contract. But given India’s snail-paced crime investigative machinery and justice system, that is likely to prove a long haul.