In the wake of Nova Corp.’s filing for court protection Friday, employees said that although they were anxious over their livelihoods, they were relieved to no longer have to cope with a barrage of complaints from students and teachers.
Nova, the nation’s largest English-language school chain, applied for protection under the Corporate Rehabilitation Law with the Osaka District Court with debt of about 50 billion yen and suspended operations of all its schools.
Employees, mainly in their 20s, remained at their workplaces until the last moment, while many teachers had already stopped reporting to work over delays in salary payments. Lesson fees were also refunded to students who canceled their contracts with Nova. An employee in her 20s, who was manager of a branch in an office district in the Tokyo metropolitan area, said she began working for Nova after graduating from university as she wished to help people who wanted to learn English.
But she soon became dissatisfied with her position when she was instructed by the headquarters to try to get prospective students to sign lesson contracts.
As the number of branches increased around 2004 to 2005, more emphasis was placed on getting prospective students to sign contracts. In one case, one of the woman’s colleagues was reprimanded for opposing a superior over the policy.
In June, when Nova was punished by the Economy, Trade and Industry Ministry over lesson contracts and cancellation problems, she believed that Nova would recover.
She heard that the police had to be called to another branch because a student had become angry to the point of violence, apparently over a lesson contract dispute, but the headquarters offered no assistance in the matter. “I still told myself that I should hang on as long as I was getting paid,” she said.
Foreign teachers started not showing up for lessons in mid-September when their salary payments were delayed. Consequently, dozens of complaints poured in, creating chaos for the company’s inexperienced receptionists. One staff member complained of not being able to afford food, while another had been reduced to tears every day before she finally collapsed and stopped coming to the office.
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Stock speculators involved
OSAKA–A group of stock speculators charged by the Osaka District Public Prosecutors Office on suspicion of violating the Securities and Exchange Law, had been involved in a Nova capital expansion plan, the Yomiuri has learned.
The plan had been promoted by former Nova President Nozomu Sahashi, who was dismissed Thursday. Sahashi’s financial problems may have led him to contact the group, as such groups control stock prices to gain illegal profits. Nova’s court-appointed administrators stated that the move was grounds for Sahashi’s dismissal.
According to sources, Sahashi had contacted the group led by Haruo Nishida, 57, an investment adviser who was arrested by the prosecutors on Oct. 12 on suspicion of manipulating the price of a construction company stock.
Nova announced on Oct. 9 it would issue stock warrants facilitating the purchase of 200 million new stocks, nearly three times the stock that had been issued, to two investment funds, with a view to securing about 6.4 billion yen. The funds are located in the Virgin Islands.
Nishida is said to have known people related to the investment funds and invited investors to Nova’s plan before it was announced.
TozenAdmin
Japanese chain’s closure hurts New Zealand teachers
The New Zealand embassy in Japan says hundreds of New Zealanders have been caught out by the closure of the country’s biggest English language school chain.
Thousands of foreign teachers have been made jobless and face expulsion from Japan after the Nova English language schools folded.
The embassy says it has received a steady flow of calls from New Zealand teachers starting to experience financial problems.
Many of the workers have not been paid for months as the company struggled to stay afloat.
The embassy says Nova had employed 200 New Zealanders.
It is advising those in financial difficulties to contact the company’s regional offices, or seek assistance from their bank, insurance company, family or friends.
http://www.radionz.co.nz/news/latest/200710281048/japanese_chains_closure_hurts_new_zealand_teachers
Don’t leave Nova students in the lurch
Nova Corp.’s students have been left in the lurch–and out of pocket–after the company announced it would temporarily close its schools. Steps must be taken to ensure these students can continue taking English-conversation lessons.
Nova, the nation’s largest English-language school chain, dismissed cofounder Nozomu Sahashi on Friday and filed for protection from creditors with the Osaka District Court under the Corporate Rehabilitation Law. Nova’s total debts are estimated at 43.9 billion yen.
Nova, which was founded in 1981, was a late arrival in the industry, but has relentlessly expanded its business with the aim of opening 1,000 schools nationwide. Nova had 300,000 students at its about 670 schools, which were staffed by 4,900 non-Japanese instructors and other employees.
Despite proclaiming that students could book language lessons anytime they wanted, Nova suddenly pulled the plug on many such bookings, citing reasons including a shortage of instructors. Nova refused to accept students’ requests to have contracts terminated midterm. In June, the Economy, Trade and Industry Ministry ordered Nova to suspend for six months its soliciting and signing up of customers for new contracts of one year or longer.
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Shrinking income
After the ministry’s order, Nova was swamped with demands to have contracts canceled. Sales plunged, and the company became unable to refund students’ prepaid tuition fees. Wage payments for instructors and employees were delayed, and the reeling company was finally forced to close its doors and cancel its lessons.
Sahashi reportedly attempted to procure funds by issuing at his own discretion stock purchase warrants to be allotted to overseas-based investment funds. Sahashi’s whereabouts are unknown, and even company executives have been unable to reach him, according to sources.
Nova’s management apparently decided that sitting on their hands while hoping the company could turn its fortunes around was no longer a viable option. In the end, Sahashi was dismissed as president.
If Nova goes bankrupt or lawyers consolidate its debts, Nova students would have nowhere to take lessons. Instructors and employees also would lose their jobs. Measures should be taken so students and non-Japanese instructors will not be left out on a limb.
Students have forked out about 40 billion yen in prepaid tuition fees. But under the Corporate Rehabilitation Law, payments of unpaid wages and taxes have a higher priority than repaying the tuition fees. As a result, students who paid their entire tuition fees in cash in one lump sum are very unlikely to get a full refund.
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Searching for a sponsor
Nova’s most pressing task is to find a sponsor company for its rehabilitation.
Nova’s sales and students account for about 50 percent of the English-language school market. Accepting such a huge number of students at the drop of a hat would be beyond the ability of any single firm in the industry, so it is likely that retail chain companies and Internet firms will have to step in as a sponsor.
Court-appointed administrators said Nova is required to find a sponsor within one month. The administrators also indicated they would begin bankruptcy procedures if the company fails to find a sponsor during this period.
After the bubble economy burst in the early 1990s, English-language schools went belly-up one after another. In 1994, Nova accepted free of charge students from another chain with 50 schools when it went bankrupt.
The ministry must work on the assumption that Nova is incapable of getting back on its feet and arrange remedial measures, such as having other schools accept Nova’s students.
Foreign teachers jobless after Japan school goes bust
Thousands of foreign teachers have been made jobless and face expulsion from Japan after the country’s biggest chain of English language schools folded and sought protection from creditors.
Nova Corp said on Friday that it has filed for court protection from creditors amid efforts to turn its business around after being punished by authorities for misleading students.
Nova has some 7,000 employees, of whom about 4,000 are foreigners, Japanese media estimated. Many have not been paid for months as the company struggled to keep afloat.
The British and Australian embassies in Tokyo are offering advice to its nationals left jobless.
About 300,000 students, many of whom who have prepaid for lessons, are also affected by the school shutdown.
“It’s a quite a large problem,” said an official at Australia’s Department of Foreign Affairs and Trade in Canberra. The Australian government estimates about 900 Australians are employed at Nova.
The Australian government has asked national carrier Qantas to offer reduced airfare for a limited period to Australian Nova employees wishing to go home.
The British Embassy also said on its web site on Saturday that it was “aware of recent concerns regarding payment of wages to Nova employees,” and said they are “closely monitoring the situation.”
It urged the employees to contact regional Nova offices and workers’ union representing the company’s workers.
Many teachers, unaware that the company had decided to file for court protection, turned up at work on Friday only to find the schools closed.
“Teachers are always the last ones to be told,” the Japan Times newspaper quoted 32-year old Genevieve Latimer, an Australian, as saying. “I haven’t even received my September paycheck.”
Many teachers are also left worried about their visa status.
Nova, which operates over 900 schools in Japan, posted net losses for the past two business years and said it held a total 43.9 billion yen in debt as of July.
Nova said a rapid expansion has lowered its profitability and a government penalty to curb taking on new students has hit revenues.
In June, the trade ministry punished Nova for misleading prospective students about its services. The company was forbidden for six months from signing up students for contracts that were on year or longer, or more than 70 hours of lessons.
Two lawyers, appointed by the court to oversee Nova’s assets and other affairs, told a news conference on Friday they would try to find a sponsor to help rebuild the company, but would dissolve the firm if they could not do so within a month.
Japanese internet firm Rakuten Inc has shown an interest in helping Nova, a Japanese daily Asahi Shimbun reported on Saturday.
The lawyers said they would contact Aeon Co Ltd, Japan’s second-largest retail group, and other companies on the possibility of becoming a sponsor, the paper said.
http://www.washingtonpost.com/wp-dyn/content/article/2007/10/27/AR2007102700334.html
Hundreds of NZ teachers lose jobs in Japan
Hundreds of New Zealand teachers face unemployment and eviction from their homes after the collapse of one of Japan’s biggest English language schools.
The Nova group has been in trouble for months and has now closed its doors and called in the receivers with debts of over 500 million dollars.
Nova’s 6,000 staff had already been worried the company was going under.
Many were owed at least a months pay.
Now their worst fears have come true.
As well as no pay cheque many foreign staff face eviction because Nova was paying their rent.
Nova had employed around 500 New Zealanders – but many had already quit after they weren’t paid last month.
The company’s problems began when it expanded too rapidly and then fell foul of Japanese education authorities for failing to deliver on promises made to its students.
Faced with no work and Japan’s high cost of living many foreign staff are expected to head home.
The New Zealand embassy in Japan is offering advice to staff about other possible work or whether they might be eligible for redundancy or unemployment insurance.
http://www.tv3.co.nz/News/HundredsofNZteacherslosejobsinJapan/tabid/209/articleID/37869/Default.aspx
Employees’ quest to recover wages, get jobs begins
Nova employees and union officials lashed out at the language school chain’s move Friday to seek court protection from creditors, and called on the government to ensure its nearly 7,000 workers, many of whom have not been paid for months, receive their wages.
The announcement caught most employees by surprise, said Jamie Scarrabelotti, a Nova employee in Osaka’s Namba district.
“We showed up for work at 9 a.m. Friday morning, and it was business as normal. At 11 a.m., I heard from Nova’s foreign personnel office that the company was going to ask for government assistance, and that if they didn’t get it, they may have to declare bankruptcy,” Scarrabelotti said.
At a Friday afternoon news conference in Osaka, a spokesman from the General Union, which represents Japanese and foreign employees at English conversation schools, said they were petitioning the central government to take action and establish emergency measures to assist Nova teachers and staff.
“We can’t be very optimistic about Nova’s recovery. Just yesterday (Thursday), Nova said that unpaid salaries would be paid and that students would receive refunds by the end of the month. Now, they file for bankruptcy protection. We can’t trust what Nova officials say,” said Katsuji Yamahara, a union representative.
Toshiaki Higashibata, a lawyer representing Nova, told a separate news conference that unpaid salaries had reached ¥4 billion. However, Yamahara warned that the government needed to ensure Nova provides proper documentation of unpaid salaries in the weeks and months ahead.
“We’re worried that even if the company undergoes restructuring, the same problems related to unpaid salaries will not be solved. Nova should continue paying teachers and staff, even though the schools are now closed down,” Yamahara said.
The concern about receiving unpaid wages is especially strong among employees and union officials because Nozomu Sahashi, who was ousted as Nova president Thursday, has disappeared and it remains unclear as to who is in charge.
“Who are the real owners of Nova today? We don’t know,” Yamahara said.
The General Union also said it will soon formally approach the immigration bureau to request it extend the visas of Nova’s foreign teachers who wish to stay in Japan and find other work. The embassies of Australia, New Zealand, Canada and the United Kingdom will also be asked to offer whatever assistance they can, including financial help, it added.
The union also called upon the central government to provide information about Nova’s situation in English.
“Nova claims to be the largest employer in Japan of foreigners, and a lot them don’t speak Japanese. Unfortunately, there are few counselors at job agencies who speak English, and almost no bilingual information on the Internet. What’s needed are counselors with a foreign-language ability, as well as bilingual pamphlets and bilingual Internet home pages,” Yamahara said.
To deal with immediate Nova-related staff problems, there will be two union-sponsored events over the next few days. In Tokyo, the National Union of General Workers Tokyo Nambu will hold a hearing for teachers and administrative staff Sunday at 7 p.m. at its office. The General Union will hold three separate hearings Monday at the PLP Kaikan in central Osaka. Two of the hearings will be in English and one will be in Japanese.
Call (03) 3434-0669 for more information about the Tokyo hearings, and (06) 6352-9619 for those in Osaka.
Teachers angry and insecure over future
Thrown suddenly out of work, language teachers with Nova Corp. in Tokyo were quick to react to their employer’s move Friday to file for court protection from creditors.
“This was in the back of my mind,” Genevieve Latimer, who was visiting a government-run job center in Shinjuku Ward, said of Nova’s decision. “I haven’t even received my September paycheck,” the 32-year-old Australian said.
Job-hunting just minutes away from Nova’s Shinjuku school, where she taught for more than five years, Latimer said it was her Japanese boyfriend who happened to catch the news on TV and informed her of Nova’s action.
“Teachers are always the last ones to be told,” she said while waiting in line at Hello Work Shinjuku, where she had gone to search for leads to a job in a different industry.
Brent Stephen, a teacher at Nova’s Shinbashi school for more than a year, puzzled over the legal liability of Nozomu Sahashi, who was ousted Thursday as the language school’s president.
“I don’t understand why Sahashi will not go to jail for this. His decisions screwed thousands of people,” the 24-year-old from Seattle said on his way out of the job center.
Stephen claimed Nova had offered no explanation for holding up his September paycheck, worth about ¥250,000, and said he would have to rely on his savings for the time being.
He said he had enough savings to tide him over for 1 1/2 months, but wondered if that would be enough time for him to land a new job. “The job market is flooded with teachers who are leaving Nova,” he said.
According to staff at the job center, which set up a special window for Nova workers Friday, they had fielded some 50 Nova-related phone calls and received more than a dozen visitors throughout the morning.
Most were inquiring about their unpaid wages and job opportunities.
The center, run by the Employment Security Bureau of the Health, Labor and Welfare Ministry, said it will provide job counseling to non-Japanese teachers. However, some teachers fear Nova’s collapse has cost them more than their jobs.
A 36-year-old from Canada, who asked to remain anonymous, said he may be forced to leave his apartment because the rent had been deducted by the language school chain from his paychecks.
“I don’t know how that is going to turn out,” he said, adding he had received no word from Nova on his visa status or unpaid wages. “This is not a surprise, although I had a false sense of hope,” he said.
“The students are angry as well. They claim that Nova shouldn’t have expanded this fast, and I agree with them. This was more about greed rather than having a stable business,” he said.
Nova students give poor grades to management
Though forewarned of their language school’s financial woes, students Friday reacted to the news of Nova Corp.’s bankruptcy with shock and disappointment.
Some said they were satisfied with their lessons but unhappy and upset with management.
Ryotaro Oba, 47, of Setagaya Ward, Tokyo, a Nova student for more than a decade, learned of Nova’s financial collapse from the morning news. Oba was soon to transfer from the Gakugei Daigaku school on the Toyoko line to the Jiyugaoka school two stations away due to the school’s streamlining of branches.
His final class at the previous school on Oct. 20, however, was suddenly canceled the night before when Nova couldn’t get a teacher for him.
Instead, Oba had reserved a class for Saturday at the new school but was informed it would only be held if a teacher was available. Now, he doesn’t know when or even if there will be a next class.
“The school worked for me because I wanted to have an opportunity to speak English casually, and the classes weren’t so expensive,” said Oba, a public servant. “It’s really too bad that this happened, and I hope they can revive,” said Oba, who still has tickets for classes good until March.
A 32-year-old woman from Nerima Ward, Tokyo, who attended Nova’s Oizumi Gakugen school for about four years said she was also facing a transfer to another school near Nerima Station. She took her last class at the school Thursday, the day the school closed, but said no mention was made of the company’s pending bankruptcy.
The woman, who declined to be named, said she only found out about the bankruptcy when she showed up for class at her new school around noon Friday and found a notice posted on the door.
“I really liked the lessons there because the teachers were dedicated. Despite the problems of their payment delay, they came until the last class yesterday, and the farewell party was actually touching,” she said. “I have no complaints about the classes, but the management is really disappointing. I wish they had done something earlier before it went this bad.”
The woman said she had had bad experiences with management several times over the course of the four years she took classes. On a few occasions she tried to get refunds for her coupons but was told this was not possible according to the terms of her contract.
The company was always slow to respond to her questions concerning her contract, she said. “I felt they weren’t acting for the convenience of the students but for themselves.”
Yoshimasa Watanabe, a 61-year-old retiree who also attended the Oizumi Gakuen school and was preparing to transfer to Nerima, said he knew Nova wasn’t getting any revenue as it was losing students.
“A lot of our conversations these days ended on the issue of what’s going to happen to Nova,” said Watanabe, who took lessons three or four times a week.
Watanabe still has about 100 lesson coupons, but was unsure whether Nova would give him a refund.
“Actually, I was hoping against hope (that they wouldn’t go down,)” Watanabe said.
Maki Nobata, a Nova student and office worker in Tokyo, said she was considering asking Nova to refund her money since she wasn’t satisfied with the lessons there.
“Some teachers are good, but many others are quite young and their vocabulary is poor. I was just wondering what I went to the school for,” Nobata said.
She said the reports about the language school’s financial difficulties also made her consider asking for a refund.
“I bought lesson (coupons) worth about ¥500,000, and I still haven’t used one-third of them,” she said.
ESL teachers left in limbo in Japan
660 Canadians among 4,000 out of work as 900-school Nova Group chain goes bankrupt
An estimated 4,000 foreign teachers, including about 660 from Canada, are without jobs after Japan’s largest school chain, Nova Group, closed its 900 schools and declared bankruptcy yesterday.
Many teachers are owed $4,000 in salary for September and October, said Catherine Campbell, a Cape Breton native who has taught English at various schools during 13 years in Japan.
“For many people, their rent has not been paid either, if they live in Nova housing,” said Campbell, who now represents teachers in Japan’s National Union of General Workers.
“The company deducts rent from their salary.”
“I’ve heard at least a dozen reports of eviction notices, very short, only two days in some cases,” Campbell said in an interview. “In some cases, they’ve gone to live with friends. In other cases, they are staying in the apartment even with an eviction notice. They still have a visa, and can find work elsewhere. But that’s the big problem. There’s a shortage of other jobs out there.”
Star calls to Nova Group’s Yonge and Davisville office in Toronto, its only location in Canada, were greeted by an answering machine.
Teachers and foreign union leaders say the Nova Group nightmare highlights the worsening treatment of foreign workers in Japan, once known for easy money during the 1980s bubble economy.
Workers characterize Nova Group, founded in 1981 and which now has 400,000 students, as an empire with a fly-by-night mentality that grew too big too fast, grabbing almost half of Japan’s burgeoning ESL market.
Nova Group’s problems multiplied earlier this year when a Japanese court ruled that it cheated thousands of students out of refund money, and created false ads, featuring a rabbit, that indicated students could study any time they wanted.
Campbell said Japan’s Industry Ministry neglected to monitor Nova from the beginning, and then over-reacted by banning the company from signing long-term deals with students.
“After that, Nova just started bleeding customers,” said Campbell. “The reports of staff not being paid accelerated the problems with their reputation.”
Teachers said about 2,000 Japanese staff, such as office workers, have not been paid since July in some cases.
Students, meanwhile, are demanding refunds. One Japanese college student, who asked not to be named, told a news conference yesterday that she recently paid 600,000 yen ($5,050) for three years worth of lessons. She plans legal action to reclaim 400,000 yen in refunds.
That might not be easy.
Osaka District Court yesterday granted Nova Group court protection from creditors under the Corporate Rehabilitation Law. Local press reports said the firm has debts estimated at 43.9 billion yen, or about $370 million dollars. The Jasdaq Securities Exchange in Tokyo suspended trading in Nova stock, and plans to de-list it on Nov 27.
The chain offered classes in conversational English, French, German, Spanish, Italian and Chinese. It recruited teachers at university campuses in Canada, the U.S., the U.K., and Australia, which supplied nearly half its foreign staff.
Embassies in Japan help unpaid teachers caught in foreign language school debt crisis
The Australian and British Embassies in Japan have begun providing assistance to their citizens working for Nova, Japan’s largest chain of private foreign language schools, after it filed for court protection from creditors.
The two embassies have set up sections on their Web sites to provide some support for teachers who reportedly have not been paid since September. Both said there were limits to how much assistance they could provide, because it was a private employment issue in Japan.
The Australian Embassy said the country’s Qantas airline will offer reduced airfare rate for a limited time to Australian Nova employees who want to return home.
The embassy will also provide a list of English-speaking lawyers for those seeking legal help, it said.
The British Embassy said it could help British employees of Nova contact family and friends in Britain if they were left with no funds, the embassy’s Web site said.
Osaka-based Nova Corp. has debts estimated at 43.9 billion yen (US$385 million; ?269 million) and employs about 4,500 foreign instructors, according to Japanese media.
Nova Corp. filed the protection request with the Osaka District Court on Friday under Japan’s Corporate Rehabilitation Law, according to court officials.
Nova officials were not immediately available for comment Saturday.
Nova’s current plight began after consumers filed complaints claiming the company’s advertisements about its services were misleading. In June the Ministry of Economy, Trade and Industry ordered Nova to suspend part of its business operations.
The company ? which promised in its advertisements a “study abroad experience at your local train station” ? has been forced to shut down some of its schools due to a sharp decline in student enrollment.
http://www.iht.com/articles/ap/2007/10/27/asia/AS-GEN-Japan-Nova-Court-Protection.php