BEIJING - The owner of a kindergarten in Northwest China's Gansu province, who illegally removed all seats in a school bus so that the vehicle could take in more children, has been arrested, local prosecutors said on Sunday.

Twenty-one people, including 19 preschoolers and two adults, died when the nine-seater school bus illegally carrying 64 people crashed head-on with a coal truck in Yulinzi township, Zhengning county in Qingyang city, on Wednesday. Another 43 were injured.

The bus belonged to Little Doctor Kindergarten in Zhengning. Li Jungang, head of the kindergarten, was arrested under the suspicion of criminal traffic offense as he illegally removed all seats in the van, the county's procuratorate said on Sunday.

After the crash, four officials, including the heads of the county's education and traffic authorities, were suspended from their positions and are under investigation, according to the city government.

Lu Huadong, chief of Qingyang education bureau, was quoted by China News Service as saying that they had asked the head of the kindergarten to take proper measures to stop overcrowding of school buses. But, apparently, no rectifications had been made.

However, Li's relatives revealed that the local traffic and educational authorities had never taken any concrete measures to help private educational institutes to solve their problems.

Li's brother, whose name was not identified, told China National Radio on Saturday that since the kindergarten was set up in 2004, overloaded school buses would occasionally be stopped by the traffic police and allowed to move on once a fine of 500 yuan ($79) was paid.

Li tried in vain for years to get interest-free loan from the government to improve the kindergarten's facilities, Li's brother said.

Apparently, Li is still in debt and could only afford to buy four second-hand vans for bringing the children to school. It had 737 students before the accident, reports said.

Meanwhile, on Sunday, an official surnamed Zhou from the emergency response office of Qingyang city government told China Daily that families of the 19 children who died in the fatal traffic accident had signed the compensation contract and each of them will receive 436,000 yuan for their loss.

He did not respond to questions about whether the family of the teacher who died in the collision would be compensated too.

The city government also pledged to allocate 680 million yuan to build at least 155 kindergartens in the next three years and ensure that every town will have a public kindergarten equipped with a school bus that meets safety requirements, according to a statement released on its official website on Friday.

The statement said that the city government would suspend the plan of vehicle purchases for its officials in 2012 and use the money to buy more school buses.

Little Doctor Kindergarten was shut down on Friday and local education authorities decided to open a new public kindergarten at the same site, which is scheduled to open on Monday.

"The time is not fixed yet as it's not sure that we can get enough teachers, textbooks and other teaching facilities in place by tomorrow," said a publicity official from the county government, who declined to be named.

"It's up to parents to send their kids to the new kindergarten or transfer them to another kindergarten," he added.

An oil company has donated a 45-seater bus to the new kindergarten, according to a notice on the city government's website.