Larry Xiangdong Chen at GSX IPO
Richard Drew/AP Photo
  • Larry Chen was once one of the world's richest people after founding online-tutoring company Gaotu Techedu Inc.
  • But the executive has lost nearly $15 billion since late January as shares of Gaotu tumble, according to Bloomberg.
  • China's corporate crackdown on education companies has been the latest blow to Gatou and Chen's' fortune.
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A Chinese education executive's tumbling fortune has fallen further as China extends its corporate crackdown to the private-tutoring sector.

Larry Chen, the former school teacher who was once one of the world's richest people from founding Gaotu Techedu Inc., is now worth $235 million, according to Bloomberg.

Shares of his online tutoring firm that was formerly known as GSX Techedu have plunged over 70% since Friday following reports of regulatory overhaul of for-profit Chinese education companies. The stock is down nearly 95% year-to-date.

Chen has lost more than $15 billion in wealth since late January as his company's stock has tumbled, Bloomberg said.

The latest blow came on Saturday when China released new regulations that bar companies that teach school curriculum from making profits, raising capital, or going public. On Saturday night, Chen said that his company will "comply with the regulations and fufill social responsibilities," per Bloomberg.

Gaotu Techedu has also been the target of multiple short-sellers. In 2020, Grizzly Research released a report accusing the company of drastically overstating its profitability and faking student enrollments. Prominent short-seller Carson Block has called Gaotu a "near-total fraud," while Andrew Left of Citron said it's "the most blatant Chinese stock fraud since 2011."

Read the original article on Business Insider