For the fiscal year 2020 ended February 29, 2020, “Light Class” sales accounted for approximately 3% to 4% of the company’s total estimated revenues.
According to the statement “TAL discovered irregularities and violations of the Company’s business conduct and internal control policies by an employee in the Company’s newly introduced “Light Class” business.”
The employee in question has now been taken into custody by the local police. On the news shares plunged over 20% in after-market trading.
Just last week, the ‘Starbucks of China’, Luckin Coffee, revealed that a preliminary investigation had turned up suspected fraud of over $300 million.
Nonetheless analysts demonstrate a bullish outlook on Tal Education. For instance, Bank of America’s Lucy Yu recently upgraded TAL to ‘buy’ arguing that the stock’s long-term structural growth could be “even more robust” when COVID-19 has passed. (See TAL’s stock analysis on TipRanks)
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