Maureen Houssein-Mustafa, who owns Australasian College Broadway. Photo: Ryan Stuart Under administration: The Australasian College. Photo: Lidia Nikonova
A Sydney beauty college run by a prominent political donor and Order of medal recipient has gone into administration, leaving hundreds of students in the dark and up to 80 staff rocked by dismissal letters on the day before Christmas Eve.
The Australasian College Broadway, which earned more than $10.4 million in taxpayer funded loans last year, went into administration on Friday, according to documents lodged with the n Securities and Investments Commission.
The college’s more than 800 students have yet to be told it is unlikely they will be able to resume their studies at the Ultimo institution after the summer break.
The 22-year-old college is run and owned by Maureen Houssein-Mustafa, a prominent donor to both the Liberal and National parties, who came 29th on the BRW rich list in 2014 after earning more than $40 million.
Fairfax Media sought comment from Ms Houssein-Mustafa on Wednesday, and was told to contact the administrator.
In 2014 she told the Financial Review it was “never about the money”.
“I had a vision; we started small and I worked very hard and my vision was all about quality training,” she said.
In 2011, she received the Medal of the Order of for services to vocational education and training. She had previously co-hosted a $1500 a head fund-raiser for former Liberal leader John Brogden and donated thousands of dollars to the National Party.
In 2014, a NSW police investigation was launched into allegations hundreds of “phantom students” were enrolled in courses they never completed.
A NSW Police spokesperson said the investigation was ongoing. Ms Houssein-Mustafa has previously strongly denied the allegations.
In a letter to employees on December 23, administrator Robert Moodie of insolvency firm Rodgers Reidy confirmed that all staff would be let go before Christmas Eve.
“The company has ceased trading upon our appointment and as a result your employment has been terminated,” the letter said.
Mr Moodie told Fairfax Media the investigation into the college was in its infancy and that the move into administration was caused by a “lack of cash flow”.
With a student cohort of more than 800, only 73 students graduated from the college last year, according to Federal Department of Education data.
“At this stage it is highly unlikely the college will be trading in 2017,” said Mr Moodie.
A spokesman for the n Skills Quality Authority said the regulator has had a number of interactions with the college in recent years and that a further targeted audit was “well advanced” when the company entered administration.
He said ASQA had rejected an application from this provider to renew its registration in 2012, but this was overturned by the Administrative Appeals Tribunal.
The college’s collapse comes just three days before sweeping reforms to vocational education funding come into force across .
The scandal-plagued VET FEE Help scheme, which blew out 10-fold from $325 million in 2012 to more than $3 billion in public debt this year, will be replaced by the VET Student Loans scheme from January 1, with tougher regulations on providers who have to re-apply for accreditation.
Federal Education Minister Simon Birmingham said the new VET Student Loans program will ensure providers go through a rigorous application process.
“There will be extensive monitoring and evaluation to ensure they are delivering education that students and employers value and that taxpayers are willing to continue supporting,” he said.
Mr Moodie acknowledged “the changes obviously put pressure on the college”, but he was not in a position to comment on the impact they had on the move into administration.
He said the firm will look at the sale of shares in another company owned by Ms Houssein-Mustafa, MHM Higher Education, one of country’s only private higher education providers accredited to run HECS-funded degrees in health and wellness, to enable a return to creditors.
It is understood the higher education standards authority, TESQA, has been closely monitoring dual VET FEE-HELP and HECS providers.
Students concerned about the future of their course have been advised to contact the n Council for Private Education and training.
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