JUST two days after lodging complaints against the Consumers Association of Singapore (Case) for anti-competitive practices, The Stansfield Group has filed a lawsuit against the consumer watchdog.

In the suit filed on Friday evening, lawyers representing the company behind private schools here allege that Case had breached an agreement governing insurance payments that effectively hampered its ability to bring in foreign students.

This tarnished the schools' reputation, which resulted in existing students pulling out, and a drop in enrolment as well for new ones, it alleges.

Stansfield Group chairman Kannappan Chettiar said that the school is still assessing the damage but 'estimates it to be around $20 million'.

It all started last November when Case suspended the CaseTrust membership of Stansfield's two schools - Stansfield College and the Singapore Institute of Commerce - for 23 days.

Private schools which want to enrol international students are required to join a scheme called CaseTrust for Education, which is managed by Case.

This means schools must deposit students' fee payments into a separate bank account, which releases the money to the schools in instalments. Alternatively, schools can buy insurance policies so students are refunded the remainder of their fees should the school close down.

Stansfield maintains that Case has endorsed NTUC Income as the sole provider of this insurance scheme, and in October last year, the insurer suspended Stansfield's student insurance policies.

Income's exclusive rights to provide insurance for private schools was the crux of Stansfield's complaint to the Competition Commission of Singapore.

Case rebutted Stansfield's complaint on Friday, objecting to allegations that it had the power to appoint Income. Rather, Case and Income were invited to participate in the scheme by the Economic Development Board. Besides, the school also had the option to use the bank deposit system.

As to the suspension of the school's CaseTrust membership, the consumer group's executive director, Mr Seah Seng Choon, told The Sunday Times this happened because it had failed to comply with rules protecting students' fee payments.

Stansfield's two schools had appeared to have breached the rules when it was discovered that some of their foreign students did not have insurance.

Stansfield, however, is suing Case on the grounds that it was not given a chance to answer Case's allegations regarding its non-compliance, as it was entitled to under the CaseTrust membership agreement code, before being suspended.

During the 23-day suspension, foreign students who had already enrolled with Stansfield were left stranded as their student passes could not be issued. Case lifted the suspension on Dec 13 when Stansfield met the scheme's requirements.

But the school's troubles mounted when, in the same month, China's Education Ministry advised students and education agents to avoid dealing with six schools here, including Stansfield's, as they had been suspended by Case. The advisory was lifted this April.

This, the school says, has resulted in students withdrawing and a drop in fresh enrolment numbers.

Last year, Stansfield's two schools had about 2,700 students, with around 1,100 foreigners. Now, there are just 300 foreigners out of a total student body of 1,800. 'We used to get about 70 to 100 new students per month; now we can't even get seven,' said Mr Chettiar.

The school had also closed its China offices in Shanghai and Beijing this February.

Media reports, Stansfield claims, have also left their students in Singapore worried.

'A batch of 40 students all went to another school after they finished their semester,' said Mr Chettiar, who founded Stansfield in 1993.

He said Stansfield College is a stable institute which has bagged the Enterprise 50 awards - a ranking of 50 of the most enterprising privately held Singapore corporations - for five consecutive years since 2002. It also reaped $4.47 million in after-tax profits in the year ending March 31.

When contacted, Mr Seah said Case will 'seek legal assistance' and 'respond accordingly' to the suit.

Asked why he decided to file the suit now, Mr Chettiar said: 'Stansfield's reputation in the eyes of the public has been damaged.

'I spent 15 years building this name up and now I have to start from zero again. I need to clear our name.'

mavistoh@sph.com.sg

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