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Hundreds of young New Zealanders have been caught up in financial problems affecting Japan’s biggest private English language school, Nova.

Japanese newspapers reported that the company was closing 200 of its 900 campuses after the Government imposed a six-month ban on new long-term student contracts at the company in June.

A New Zealand Embassy spokesman said two New Zealanders affected by the closures or non-payment of wages had contacted the embassy but Kiwis working for Nova would “probably [be in the] … hundreds”.

Ben Takizawa (formerly McGrigor), an Aucklander who taught English in Osaka for a year until February, said about 10 per cent of the company’s 5000 foreign teachers were New Zealanders.

Another New Zealander, who did not want to be named because he still works for the company, said he had yet to receive his pay for August, which was due on September 14.

He has a Japanese wife and two children aged 6 months and 4 years and is now looking for another job.

“I just want New Zealanders to know that Nova is not a good option at the moment,” he said. “They are late on pay this month for teachers, in July the staff salaries were late, and supposedly the rents haven’t been paid on a number of branches and they are closing branches down.

“It’s just not a safe option to come over at the moment.”

But an Auckland University student who was interviewed by a Nova recruiter in Auckland on Saturday said the interviewer, an Australian based at Nova’s Sydney office, did not mention anything about the company’s problems.

“The only thing he mentioned about the business was that they were expanding – a new market opportunity had opened in Taiwan.”

He said the recruiter interviewed 11 applicants in Auckland and also visited Dunedin and Wellington.

The New Zealander still working for Nova said: “I can’t believe they are still recruiting people. It’s criminal. People are coming over to just a mess. They don’t know about it. It’s wrong.”

Nova’s problems stem from an investigation by Japan’s Ministry of Economy, Trade and Industry which found the company was requiring students to pay in advance, then refusing to refund their money in full if they pulled out.

At its peak, the company had 480,000 students. But it said last month that student numbers would be down 19.2 per cent for the year to September.

The New Zealand teacher, a supervisor at his branch, said most teachers had been paid but supervisors were still waiting for their August pay.

“I think they have just run out of money. There are a lot of stories floating round. They are not really telling us anything, they are just keeping us in the dark.”

The New Zealand Embassy said it was referring New Zealanders to the Nova union and to the Japanese Government’s labour counselling offices.

“The embassy is continuing to monitor the situation and we remain open to receive inquiries and provide the best advice we can,” the spokesman said.

“We would advise people … to make sure [to] seek full information about a company before choosing to get a job with that company.”

http://www.nzherald.co.nz/section/1/story.cfm?c_id=1&objectid=10465542

ENGLISH teaching chain NOVA, which employs more Australians and foreigners than any other Japanese company, has admitted it may have to shut hundreds of schools to account for massive financial losses this year.

NOVA has said in a statement that it has not made any decision about the closures, but Japanese media have quoted sources as saying it is planning to axe at least 200, and probably many more, of its 900 schools.

It will reportedly target schools in Tokyo and big cities in the Osaka, Aichi and Hyogo prefectures, where rents are exorbitant.

The Kyodo news service said the number of closures was likely to be far in excess of 200 because many landlords were threatening to evict the company over defaults on rent payments.

The cuts would affect more than 1000 teachers and tens of thousands of students. It is unclear what would happen to them, although the school has reportedly said it would allow students to shift to nearby schools.

It was reported earlier this week that the chain, which has the biggest share of Japan’s billion-dollar English lesson industry, failed to pay up to half of its 5000 foreign teaching staff last Friday.

It was the second time in two months that Nova has paid staff late. The wages finally arrived this week.

“A lot of people are really scared by this,” said a 27-year-old Australian teacher in Tokyo, who asked not to be named.

“We heard about all the late wages, and there have been rumours that NOVA is going under for a while ? but now this. And they never tell us anything. We’re always in the dark.”

Louis Carlet, from Japan’s National Union of General Workers, said, “Usually we’re reluctant to speak to the press, because we don’t want to precipitate NOVA’s bankruptcy, but it’s too late for that. We putting preparations in place.”

NOVA’s financial crisis is partly due to overexpansion, but also because in July the Ministry of Economy, Trade and Industry banned the company, based in Osaka, from signing new students on long-term contracts for six months.

The order was given after a court ruled that Nova lied about its services and cancellation policy when soliciting students.

Nova posted a 2.5 billion yen ($A25 million) loss in operating profits for Japan’s last financial year, which ended in March.

http://www.theage.com.au/news/world/foreign-teachers-face-axe-in-japan/2007/09/21/1189881777745.html

Some Canadian English teachers are among the thousands of worried workers left without prospects and paycheques in the wake of vast financial problems for Japan’s largest private language school.

Nova Group, which has 900 schools, employs about 7,000 foreign workers — more than any other Japanese company.

Thousands of young Canadians have worked for Nova since it launched in 1981. When the yen was strong and the Canadian dollar weak, it provided post-college employment to pay off student loans, and offered a cultural exchange opportunity and valuable work experience.

The school’s financial problems have been getting front-page treatment in Japan. They stem from an advertising scandal and rapid over-expansion that began four years ago. Problems worsened in June, after Japan’s Ministry of Economy, Trade and Industry (METI) imposed a six-month ban on the practice of signing students to long-term contracts.

The ban came after a Japanese court ruled Nova had lied about its services and cancellation policies when soliciting students. Their practices were similar to the methods North American gyms often use sign clients to long-term contracts.

The ban led to a sharp decline in revenue when many of the 400,000 students ended their enrolment abruptly. Facing a cash-crunch, Nova began delaying the payment of salaries to foreign teaching staff and Japanese staff.

On Friday, foreign teaching staff was supposed to receive their overdue paychecks. Instead, they received a fax expressing “greatest regrets” and a promise that salaries will be paid next Tuesday.

“All the procedures for depositing the salaries have been completed. However … these were not completed in time to deposit the salaries today,” read the fax.

This was the latest in a number of faxes that have been sent since July, all of which announce delays in salary deposits.

Julie Chalmers, a University of Ottawa graduate originally from Sudbury, began working for Nova three years ago in Kyoto. She decided not to renew her recently expired contract, but is still waiting to receive her salary for August and September.

“Nova is such a huge company that it never really cared about its workers. We are all just numbers and the huge turnover rate shows just that,” she told CTV.ca.

Chalmers said Nova owes her about $2,600 for the month of August and estimates she’s due $1,700 for September. “I have no idea how I’ll get my money,” she said.

Business grad thought Nova would turnaround

Calgary-born Nabil Khan arrived in Japan two months ago, along with his fiancée. He was aware of Nova’s problems relating to the METI ban, but felt the company’s problems could be easily fixed given that Nova commanded the largest share of Japan’s multibillion-dollar private English teaching industry.

“When METI imposed the ban I saw no reason they couldn’t come out ahead … I looked at it from a strictly business point of view, many companies have been hit with much larger fines and penalties (Exxon after Valdez for example) and have made adjustments and come out ahead.

“The image of Nova was tarnished in the Japanese public’s eyes, but apologies and a true commitment to customer service would have fixed it. But nothing changed the company kept up its usual plan of operations. And to this day there seems like there is no one at the helm and we are on the Titanic as it is going down.”

Khan studied business at Memorial University in St. John’s and wanted to learn about Japan’s culture and language while seeking business opportunities in the country. He saw working at Nova as a way to get his foot in the door.

“I am owed over $2,000 from Nova and I don’t think I’ll see it. I have accepted it and am now looking for another job before there are another 7,000 teachers doing the same … at the moment, I look at it as volunteer work.”

Nova announced Friday it is closing about 200 of its 900 schools, many of which are located near train stations around the country. The company is hinting at further announcements next week.

In another fax sent to instructors on Friday, Nova CEO Nozomu Sahashi tried to reassure employees, writing: “The dark clouds that have been hanging heavily over us will be cast aside. I said previously ‘the darkest time is before the dawn’ and finally the first light of dawn can be seen … there will be no concerns regarding salaries from next month onwards. I cannot announce further details at the moment.”

http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20070921/japan_nova_070921/20070922?hub=TopStories

Nova Corp., the nation’s largest English-conversation school operator, plans to close about 50 branches at the end of this month, sources said Thursday.

The English-language school chain is to consolidate neighboring branches mainly in the Tokyo area, but also in areas including Osaka and Kobe, where a number of branches are located near each other.

The company already has begun notifying students who are subject to changes of classroom location, the sources said.

The business environment for Nova has become increasingly difficult recently, partly due to a decline in the number of students following a series of lawsuits filed by former students concerning repayment of class fees. In the wake of the scandals, the company also was hit by an order from the Economy, Trade and Industry Ministry to partially suspend operations of the school.

The planned consolidation of school branches is aimed at streamlining the business and reducing operational costs including rent.

Nova has already closed 12 school branches since March. The number of school branches stood at 913 as of the end of last month. Besides the 50 branches slated for closure at the end of this month, the company also is considering further closures, mainly among branches where office rental contracts are shortly due to expire.

Regarding the prospect of further closures, the company issued a statement saying, “At this moment, nothing has been formally decided.”

http://www.yomiuri.co.jp/dy/national/20070921TDY02003.htm

Slump from ad scandal triggers rent defaults, radical restructuring

Nova Corp., reeling from a false advertising scandal, is planning to close at least 200 of its 900 or so schools later this month to turn around its struggling operations, sources said Thursday.

The nation’s largest language school chain is mainly targeting money-losing branches, but some of the 200 branches are being closed for failure to pay rent, according to the sources.

Nova said in a statement that it has not officially made any decision on the closures and will disclose information when necessary.

Nova, headquartered in Osaka Prefecture, was ordered by the Ministry of Economy, Trade and Industry in mid-June to suspend part of its business for six months for lying to consumers about its services when soliciting students. It then went into a slump as the ruling crippled its ability to enroll new students.

The scandal prompted many students to end their enrollment, and contract cancellations will likely rise, the sources said.

At its peak in June, Nova had some 480,000 students enrolled. But Nova itself admitted in August that total enrollment will likely plunge 19.2 percent year on year by September.

The schools slated to be shuttered are located mainly in Tokyo and major cities in Osaka, Aichi and Hyogo prefectures, where rents are high. The company has already picked about 50 branches, including Nova Kids schools, for the shutdown.

The total number of closures will likely be far in excess of 200 because some landlords are threatening to evict over defaults on rent payments, and Nova itself is offering to vacate some of the properties, some of the sources say.

The 200 include branches that were shut down both in late August and this month, as well as those slated to close by the end of next month, the sources added.

Meanwhile, Nova is believed to be running short of funds because it is falling behind in employee salary payments, the sources said.

Later in the day, the General Union [Tokyo Nambu’s sister union in Osaka], which represents Nova staff, including foreign language teachers, urged the company in a written statement to proceed with caution to minimize any adverse effects on Nova’s students and employees.

http://search.japantimes.co.jp/cgi-bin/nn20070921a1.html

Nova Corp., reeling from a fraudulent-advertising scandal, is considering shutting down at least 200 out of its about 900 school branches around late September to turn around its operations, sources close to the matter said Thursday.
The nation’s largest English-language school operator plans to close mainly money-losing school branches, but the company is being compelled to close some of the 200 because it has failed to pay their rents, the sources said.

http://home.kyodo.co.jp/modules/fstStory/index.php?storyid=338019

Major English language teaching chain NOVA is considering shutting down a large number of schools, it emerged on Thursday.

NOVA’s income from lesson fees has decreased since the Ministry of Economy, Trade and Industry issued the language school a partial business suspension order over its practices. Because of this, the school is apparently pushing for a turnaround, hoping to cut costs by trimming and merging unprofitable schools.

NOVA currently operates more than 900 schools, but problems with efficiency have emerged.

Officials close to the group said NOVA has already been trimming and merging schools, focusing on unprofitable schools with low student numbers, but in the future the chain will also apply the move to major schools in cities where rents are high and there is more than one school in the same area. As many as 100 schools could be affected.

The language school will reportedly make considerations for students, allowing them to take lessons at other nearby schools.

http://mdn.mainichi-msn.co.jp/national/news/20070920p2a00m0na029000c.html

HUNDREDS of foreign teachers of English in Japan were anxiously awaiting overdue wages from the Nova language school yesterday, amid speculation that the corporate giant was close to collapse.

The country’s foreign workers’ union said it could “only hedge a guess that up to 3000” English teachers, many of them young Australians, went without pay last Friday and were left waiting nervously over Japan’s long weekend for the money.

“But at the very least there are hundreds of them. My phone hasn’t stopped,” said Louis Carlet, from the National Union of General Workers.

Some teachers said they were owed thousands of dollars, while others posted messages to say they were quitting in disgust. “I’ve never felt so defeated in my whole life,” said a 24-year-old American teacher, Jerry Johnston, who was considering leaving Japan after just two months but could not afford the air ticket.

It is the second time in two months that Nova has paid staff late. A recent slide in the company’s stock price followed news of a delay in payments to some of its 2000 Japanese staff last month.

The company employs about 7000 foreigners – more than any other Japanese company. Australians make up the backbone of its 5000-strong teaching staff. The company has more than 400,000 students, accounting for the biggest share of Japan’s multibillion-dollar private English teaching industry.

But it has been plunged into financial crisis this year, partly due to overexpansion, but also because the Ministry of Economy, Trade and Industry banned the company, based in Osaka, from signing new students on long-term contracts for six months.

The order was given after a court ruled that Nova lied about its services and cancellation policy when soliciting students.

The chief executive officer of Nova, Nozomu Sahashi, issued a statement to staff at some branches last Friday to say it had “not been possible to complete all the necessary operations to deposit instructor salaries”.

The statement assured that salaries would be deposited by today. But Mr Carlet told the Herald: “I’m getting reports that they have been cut off by their stationery suppliers, and delivery services, because they’re not able to pay them. They could be on the verge of going under at any moment. It’s very serious.”

Nova posted a 2.5 billion yen ($25 million) loss in operating profits for Japan’s last financial year, which ended in March. An article in the business magazine Toyo Keizai last month said the company was behind in payments to business partners and banks.

Although some teachers said their wages had arrived yesterday, others were still waiting late in the afternoon.

The manager of Nova’s Tokyo branch, Robert Vaughan, could not comment on the matter, and a number provided for media queries at the Osaka headquarters went unanswered yesterday.

A 28-year-old Australian, who works as a teacher at a Nova school outside Tokyo, said: “My pay didn’t come in on time and it was the same for a lot of people here.”

The teacher, who asked to remain anonymous, said: “No one seems to know what’s happening – we’re being kept in the dark.”

http://www.smh.com.au/news/world/teachers-unpaid-as-company-falters/2007/09/18/1189881511712.html