Early childhood education refers to preschool education services for children aged 0-6 years old, aiming to promote the cultivation of multiple intelligences and healthy personalities of infants and young children. In China, the scale of the early education market has reached 100 billion yuan, but it also faces many challenges and risks.
Not long ago, a news about "China's first early education stock" Meijim has aroused widespread concern in the society. It is reported that Ma Hongying, chairman of Meijim, lost contact, the company's senior management was infighting, shareholders were involved in major capital cases, a large number of its stores were closed, and consumers and employees had no way to protect their rights. What the hell is going on?What is hidden behind the crisis of Meijim?
The glory and downfall of Meijim
Founded in 1998 and headquartered in Beijing, MGM International Children's Education Group is an institution specializing in early childhood education for children aged 0-6. With the "American Jim Bailey Education System" as the core, Meijim provides diversified educational services such as infant early education, kindergarten, nursery, and parent-child amusement. Meijim used to be a leading brand in China's early education industry, with more than 1,000 stores, covering 31 provinces, municipalities and autonomous regions across the country, serving more than 1 million families, and was known as "China's first early education stock".
However, Meijim's brilliance did not last long. Since 2017, MGM has been losing money, and from 2017 to 2019, MGM's net profit was -2900 million yuan, -3500 million and -4700 million yuan, with a cumulative loss of more than 1.1 billion yuan. In 2020, affected by the epidemic, Meijim's operating conditions deteriorated even more, with a loss of 2800 million yuan, and the financial report has not yet been announced in the second half of the year.
As of June 30, 2020, there were only 851 stores left, a decrease of 149 from the end of 2019, including 76 directly operated stores and 73 franchised stores. The market value of Meijim has also fallen from a high of more than 5 billion yuan to less than 1 billion yuan, and the stock price has fallen from a high of 18 yuan to less than 3 yuan.
High-level infighting and capital disputes at the top of the company
Meijim's business difficulties are inseparable from the infighting at its top and capital disputes. In November 2020, Meijim suddenly issued an announcement, saying that Chairman Ma Hongying was missing and could not be contacted through **, WeChat and other means.
The company said that the loss of contact with the chairman of the board of directors will not have a significant impact on the operation of the board of directors and the normal operation of the company. However, the announcement has raised questions and concerns about Meijim, with some speculating that Ma Hongying may be suspected of violating the law or absconding to avoid debts.
In fact, Ma Hongying's loss of contact is just a microcosm of the high-level infighting in Meijim. As early as 2019, there was a board battle in Meijim, when Liu Junjun, the general manager at the time, tried to remove Ma Hongying as chairman through the shareholders' meeting, but was counterattacked by Ma Hongying, and the two sides accused each other of violating the law, violating the law, and damaging the interests of the company.
In the end, Liu Junjun's recall motion failed to pass, Ma Hongying continued to serve as chairman, and Liu Junjun was removed from the position of general manager and no longer held any position in the company. This board battle also led to a change in the shareholder structure of MGM, the founding team that originally held 30% of MGM's shares was diluted to less than 10%, and the new capital party became the actual controller of MGM.
The capital side of MGM is mainly composed of CITIC Construction Investment, CITIC **, CITIC Bank, etc. In 2018, Meijim introduced CITIC funds through private placement, raising a total of 10500 million yuan to repay debts, expand scale, enhance brand, etc. However, this funding did not bring a turnaround to Meijim, but instead plunged Meijim into a deeper quagmire.
It turned out that the funds of CITIC were not directly invested in the business of Meijim, but flowed to China Securities Construction Investment Innovation Investment, one of the shareholders of Meijim, through a series of complex capital chains such as capital pools, loan agreements, and guarantee contracts.
MGM's consumer and employee rights dilemma
The infighting and capital disputes at the top of the company not only affected the operation and development of the company, but also brought huge losses and troubles to the consumers and employees of the company. Due to the rupture of the capital chain of MGM, the stores of MGM have been closed, the prepaid fees of consumers cannot be refunded, and the wages and social security of employees cannot be paid, and the road to rights protection is difficult and tortuous.
According to ** reports, there have been closures of Meijim early education centers in many places across the country, and consumers have no way to complain. Some consumers enrolled their children in early education courses for a year and paid tens of thousands of tuition, only to find that the store was closed after a few classes, and the person in charge of the store could not be contacted, and they could not get any explanation and compensation. In order to protect their rights and interests, some consumers have to file a lawsuit against Meijim through legal channels, but because Meijim's assets are frozen, it is very difficult to implement, and many consumers have no choice but to admit compensation.
MGM employees are in the same dilemma. Some employees said that since the crisis in Meijim, they have not received wages and social security, and they have not even received a resignation certificate, which has affected their lives and employment. Some employees reported that the management of MGM did not care about the situation of employees, and even threatened and intimidated employees to prevent them from protecting their rights and protecting their rights. Some employees also chose to seek wages and compensation from MGM through legal means, but they also faced the problem of difficulty and time cost of enforcement.
Conclusion
The crisis of Meijim has triggered a deep reflection on the regulation and business management of the early education industry. Under economic pressure, companies need to operate cautiously to protect the rights and interests of consumers and employees. The case also reminds investors to choose their partners carefully, emphasizing transparency and sustainability. For parents, it is important to choose a formal, reputable early childhood education institution. To maintain the health of the industry, it is necessary for enterprises, enterprises and society to work together to ensure that every child enjoys safe and high-quality early education. Mei Jim