FIITJEE founder refutes allegation of money siphoning; complains of ED’s heavy-handed approach

Mumbai/Bengaluru: “I was horrified to see strangers standing next to my bed,” D.K. Goel, founder of FIITJEE, the coaching institute, narrated how officials from the Enforcement Directorate stormed into his bedroom at his house in Delhi’s Vasant Vihar on Thursday, about ten minutes past 5 am.

“They refused to show me any identification cards. I thought dacoits had entered my house,” Goel said in his first public statement since troubles began in November at the coaching institute he founded in 1992.

Goel refuted ED’s allegations of ₹250 crore fraud”> ₹250 crore fraud at the country’s premier engineering entrance exam coaching institute.

“There is no diversion of even one rupee,” he said over the phone on Saturday evening.

He claimed that the sum of ₹250 crore mentioned by ED was also incorrect, adding that the fee collected was much lower, as many parents opted to pay the tuition fees in instalments rather than one upfront payment.

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In a press release on Saturday morning, ED said that its Lucknow zonal office conducted raids at seven locations in Noida, Delhi, and Gurugram related to FIITJEE, including Goel’s residence in Delhi’s upmarket Vasant Vihar neighbourhood. The law enforcement agency said that during the raids, it found proof that about ₹250 crore was collected as fees from over 14,400 students, and the educational service was not delivered. About 32 FIITJEE coaching centres across the country were shut, the ED said.

“The collected funds were allegedly diverted for personal and unauthorized use, while faculty salaries remained unpaid,” ED said in its press release.

ED seizes cash, jewellery

During the search, ED seized ₹10 lakh in cash and jewellery worth ₹4.89 crore from Goel. The FIITJEE founder said the money was for health emergencies owing to his mother’s and his own poor health. He further claimed that his associates showed the ED officials the source of funds for all the cash and jewellery.

Queries sent to the ED over email on Sunday did not elicit a response.

Goel blames competition for his coaching institute’s public meltdown. He says rival institutes poached his staff across several centres, forcing them shut. At some centres, employees deserted FIITJEE to start their own institutes.

He blamed the authorities for freezing the bank accounts of FIITJEE and all related entities for its financial troubles and unpaid salaries to employees. The accounts were frozen on 7 February, he said. He said this, coupled with bad press, triggered the shutdown of tens of FIITJEE centres across the country. He refuted ED’s claim of 32 centres shutting, claiming the number to be “much lower” without being specific.

“We did not close a single centre. They were forced shut due to the abandonment of employees,” he said.

Starts online classes

The coaching institute, once the market leader in coaching for the Joint Entrance Examination (JEE) for admissions to the prestigious Indian Institutes of Technology (IIT) and other pre-eminent engineering colleges, said it has resumed coaching through online classes for students.

In a communication sent to students on 3 April, the institute claimed that this online “elevation phase” of classes would continue for 3.5-6.5 weeks, following which offline classes would commence.

In the same communication, the institution blamed competition for its troubles.

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“Frustrated with their failures, our competitors have been poaching our top students (only to ruin their rank & success) and also [sic.] our faculty but of no avail. Conspiracies against FIITJEE are nothing new,” read the over 2,200-word communique.

At its peak, FIITJEE operated about 70 coaching centres and integrated schools across India, expanding to Qatar and Bahrain. As of January, it had about 80,000 students, a number that has now shrunk to 55,000-60,000, as per Goel.