The owner of a private training school which was closed last week says a top official threatened to shut him down six months ago.

The NZ Qualifications Authority deregistered Ellipse Institute in Balmoral, Auckland, for not keeping almost $44,000 of student fees safe in a public trust account.

But the school's lawyer Evgeny Orlov has accused NZQA of Gestapo tactics that forced the school to close unnecessarily and put students at risk.

Ellipse has filed a lawsuit, claiming NZQA failed to give the school a chance to defend itself and planned to close it down.


In a statement of claim, managing director Bhashkar Prasad said that after a damning NZQA evaluation in November, deputy chief executive Tim Fowler visited the school in January to warn him it had failed to meet the required standards for too long.

Mr Prasad said Mr Fowler told him he could either close the school voluntarily, in which case NZQA could help, or be forced to close. He said Mr Fowler described attempted improvements as "too little, too late".

About a week later NZQA banned the school from enrolling new students. Mr Prasad estimated this cost the school $816,743 in lost revenue. It was particularly costly as he had just bought new premises in the CBD.

When the school's insurer StudentCare learned about the ban, it cancelled its cover for student fees. NZQA then ordered the school to put the uninsured money into a Public Trust account by June 5. When Ellipse missed the deadline, NZQA shut the school down.

Ellipse has applied for a judicial review of the decision, claiming it breaches natural justice and amounted to an abuse of power by Government officials.

NZQA responded that it was the school's responsibility to keep the students' money safe in case the school collapsed. If it could not arrange insurance, it was obliged to put the money into a Public Trust account.

It opposed the application for judicial review, saying many students had already found other schools.

Mr Orlov said the schools targeted by NZQA in a series of damning reviews since November were all foreign-owned, "which has a certain unsavoury element to it".

NZQA gave its lowest possible rating to Indian-run Ellipse and to Oxford International Academies, placed in voluntary liquidation by its Chinese owner, Michael Li.

It said it was not yet confident about the educational performance of St George Institute of Learning (Korean-owned) and Tasman International Academies and Victoria Institute (both Chinese-owned).