EasyCall said it was forced to make the decision -- which affects 1254 students and 90 staff -- due to the "bleak" prospects of a turnaround for the loss-making business "in the near future".
The group made an announcement to the Australian Stock Exchange this morning after seeking a trading halt yesterday. EasyCall said in market briefings last year it planned to dispose of CPG by the end of the 31 March 2006 financial year.
The administrators -- George Georges and James Stewart of Ferrier Hodgson -- were called in yesterday morning and immediately closed the subsidiary's offices around the country as they prepared to urgently seek expressions of interest in the business.
"This is a tough decision, but one which we felt compelled to take in the interests of EasyCall's shareholders," chief executive officer Chia Yew Boon said.
"This decision follows a thorough review of the CPG business by the board members of EasyCall".
He said EasyCall had provided "significant" financial assistance to try to keep CPG afloat since acquiring the business in June 2004.
EasyCall said it would continue to "actively pursue" legal action against Spherion to recover the "full extent" of losses sustained from the acquisition.
EasyCall claims it based its decision to buy CPG on incorrect business projections and other financial information supplied by Spherion and is pursuing the former owner in the Federal Court.
Georges of Ferrier Hodgson told ZDNet Australia classes would be suspended for a month and all employees bar a handful of administration staff had been stood down. At stake are more than AU$1.8 million worth of student fees and staff entitlements that are still being determined.
EasyCall's Chia Yew Boon said the company "particularly [regretted] the inconvenience this decision will cause to CPG's students and we are committed to working proactively with the administrator to minimise the impact on students -- this is our top priority".
A voice message at CPG's head office in Melbourne yesterday states students and creditors would be contacted "within the next two days regarding the current situation".
EasyCall said the financial impact of CPG's administration could not be fully determined given the litigation against Spherion and uncertainty of final outcomes from the administration process.
CPG students in Western Australia contacted ZDNet Australia to say they would file a formal complaint over the situation to the state Department of Consumer and Employment Protection.