The Skills Development Fund Corporation (PTPK) is probing the Allied Aeronautics Training Centre (AATC) after the latter came into in the spotlight over student protests on undelivered promises for government loans.

In a statement today, PTPK said since AATC had not registered with the fund corporation, it is ineligible for loan facilities provided by PTPK.

As such PTPK said it was conducting a probe under Section 72(1) of the Skills Development Fund Act 2004, which prohibits institutes from advertising themselves as skills training providers whose trainees can secure loans through the fund corporation.

If convicted, it carries a punishment of up to RM20,000, six months' jail, or both.

"AATC's management is not allowed to use PTPK's training loans as a promise to students to enrol with it," the fund corporation said.

On Monday, seven AATC students were arrested after protesting the expulsion of two students for forming a union. 

The AATC Student Union (AATC SU) was formed by students unhappy with what they claimed to be the private training centre's "broken promise" to secure government loans for their studies and instead, pushing them to take personal loans from a private bank.

The training centre, however, insisted the AATCSU is illegal, since AATC does not come under the Education Ministry's purview and has rules against student unions.

The training centre has since withdrawn its decision to expel the two students, following a meeting with parents and Human Resources Minister M Kulasegaran yesterday. 

The students said they were promised assistance to secure PTPK loans.

PTPK, in its statement today, said the minister and AATC's management were working to find the best solution to the situation.

However, it said Kulasegaran had stressed that training centres can't promise PTPK loans before any approvals are made.