English translation of the original Korean report. Images and source documents may contain Korean text.

Lecture suspension and Q&A board closure spark controversy ahead of CSAT…Timing and terms of largest shareholder change remain undisclosed

It has been confirmed that ETOOS Edu, where students have faced confusion over a popular instructor’s suspension of lectures and the closure of a question-and-answer board ahead of the College Scholastic Ability Test (CSAT), has seen its largest shareholder change from a Hong Kong-linked private equity firm to an individual. The new largest shareholder of the company, which operates ETOOS online lectures and private academies, holds 69.00% of its common shares.

The company did not disclose when the change in its largest shareholder occurred or what transaction brought it about.

An investigation by this publication confirmed on the 13th that ETOOS Edu’s current largest shareholder is an individual identified as Shareholder A, who holds 69.00% of its common shares. ETOOS Edu refused to disclose the largest shareholder’s identity, citing the protection of personal information.

Earlier, while examining ETOOS Edu’s ownership structure, this publication focused on an audit report released in April this year. According to the report, the largest shareholder of ETOOS Edu, headed by CEO Jeong Seon-wook, at the end of last year was EDU EDISON LTD., a Maltese company holding a 59.44% stake. Legal Entity Identifier (LEI) records list the company’s ultimate parent as the first fund of Anchor Equity Partners (Anchor PE), a Hong Kong-linked private equity firm.

The new largest shareholder’s stake is 9.56 percentage points higher than the stake previously held by EDU EDISON. The company said its shareholder composition had changed since the end of last year ‘in accordance with relevant laws and procedures.’ It explained that the transaction method, date and terms were ‘matters known only to the parties to the transaction’ and were difficult to disclose because the company is unlisted.

The company said the new largest shareholder has no equity ownership or fund management relationship whatsoever with former shareholder EDU EDISON, Hong Kong-linked private equity firm Anchor PE, or ETOOS Education, the company from which ETOOS Edu was spun off. It also explained that Anchor PE does not hold any stake in ETOOS Edu through other companies or funds.

■ Four Years After Online Lecture Business Spin-Off, Anchor PE Has Exited ETOOS Edu

ETOOS Edu was established in May 2022 through the separation of the private academy, online lecture and publishing businesses from ETOOS Education. It currently operates online lecture services, private academies and educational materials businesses for students preparing for university entrance examinations. Its revenue last year was 156.2 billion won.

ETOOS Education, the company that existed before the spin-off, began as Cheongsol Academy in 1998 and merged with ETOOS in 2010. In March 2023, following the business separation, it changed its corporate purposes to holding company operations and management consulting. As of the end of last year, it held a 100% stake in Gyoyukjidae and a 52% stake in Danbi Education.

Hong Kong-linked private equity firm Anchor Equity Partners (Anchor PE) has been involved in the ownership structures of both companies. Anchor PE invested in ETOOS Education before the spin-off in 2015 and secured management control in 2019. Subsequently, through the Maltese company EDU EDISON, it held stakes of 58.9% in ETOOS Education and 59.44% in ETOOS Edu through the end of last year.

However, the change in ETOOS Edu’s largest shareholder to an individual this year has also brought changes to the ownership structures of the two companies. ETOOS Edu said Anchor PE does not hold any stake in the company, either directly or indirectly through other companies or funds.

Regarding ETOOS Education, Anchor PE was reported to have raised financing in May this year. Chosun Biz reported that Anchor PE raised 100 billion won in new financing to repay funds borrowed when it acquired ETOOS Education. However, ETOOS Education’s current largest shareholder and ownership structure have not been separately confirmed.

Last year, ETOOS Education’s board of directors decided to sell its subsidiary Danbi Education and expected the transaction to be completed by April this year.

Meanwhile, students using ETOOS Edu’s services have recently faced confusion over the suspension of lectures and the closure of a question-and-answer board. After Yi Do, an instructor of Korean Geography and World Geography, discontinued his remaining lectures three weeks before the CSAT, ETOOS made the question-and-answer board private on the 9th.

The notice at the time did not include specific refund criteria or plans for replacement lectures. ETOOS subsequently told the media that it was providing individual consultations to students seeking refunds in accordance with its terms of service and refund regulations. The company explained that previously purchased courses could still be accessed until the end of their enrollment periods and that no decision had been made on whether to terminate its contract with instructor Yi Do.

As of the end of last year, ETOOS Edu had received 13.4 billion won in advance payments relating to all its courses and had 5.9 billion won in refund-related provisions. Both figures were calculated for the company’s entire course portfolio, rather than for any particular instructor.