THE private college industry body has mistakenly fuelled rumours that a major Melbourne college could be the next to shut after its website carried a dummy notification of closure that mentioned the Hales Institute by name.

Hales acting managing director Evie Liolios told The Australian the notification was wrong and that the college had not been shut and nor had it appointed an administrator.

But she declined to comment on industry rumours that her family is locked in talks to sell the business in the wake of the sharp downturn in Indian student demand across the sector.

Hales has about 1200 international students, many of them from India. It offers business, IT, cookery, hairdressing and English language courses. It is well-established and long-time managing director Spiro Liolios has recently stepped back from the business in favour of his daughter, Evie.

The Australian Council for Private Education and Training said the letter was a mistake and it was now investigating how it was made available on its website. "It is a regrettable error and we will be investigating," ACPET chief executive Andrew Smith said.

An internet link to the notification was the top item from a Google search under Hales and ACPET, and caused some panicked calls from staff when it appeared on a widely circulated industry newsletter yesterday. While the link required a password, the cached memory of the page, dated December 31, 2009, brought up the letter. It notifies that Hales had been closed and assurance arrangements for students had been activated, but the section dating the closure was filled with question marks.

There have been industry rumours that a Chinese consortium is a potential buyer of Hales.