TozenAdmin

About 1 billion yen is accounted for at Nova Corp., the failed operator of a large foreign language school chain, sources close to the firm said.

Osaka Prefectural Police are investigating how the money has been used.

Nova’s records show that approximately 700 million yen was withdrawn from one of the company’s accounts in early August last year, according to the sources. The document does not specify how the money was spent.

Roughly 1.4 billion yen was placed into the same account in September last year. However, some 1.7 billion yen was later withdrawn in the same month under the pretext of “Sahashi, temporary payment,” an apparent reference to payment made by then Nova President Nozomu Sahashi, say the sources.

The source of the 1.4 billion yen, or how the 1.7 billion yen was used, remains unknown.

http://mdn.mainichi.jp/national/news/20080626p2a00m0na017000c.html

Disgraced former Nova Corp. President Nozomu Sahashi was in possession of a large amount of personal assets when the English conversation school was on the brink of collapse, police said.

Sahashi, 56, from Osaka, was arrested on Tuesday on charges of embezzlement in the conduct of business after he was found to have used about 320 million yen that had been pooled in Nova employees’ mutual aid society. Sahashi has reportedly denied part of the allegations.

Investigators found on Tuesday that Sahashi had had hundreds of millions of yen worth of personal assets in the forms of cash and real estate when he allegedly misappropriated the massive sum from the employees’ welfare fund by transferring the money into a Nova account in July last year.

In a related development, police also arrested Toshihiko Murata, 49, former president of a Nova affiliate called Nova Kikaku, on charges of embezzlement in the conduct of business.

Murata, who was reputed to be Sahashi’s right-hand man, has reportedly admitted to the allegations. He had assisted Sahashi mainly in accounting since around 1990.

Investigators have also raided a building in Osaka’s Chuo-ku, where Nova Kikaku’s headquarters was based.

http://mdn.mainichi.jp/national/news/20080625p2a00m0na006000c.html

Nozomu Sahashi, former president of the failed language school chain Nova Corp., was arrested Tuesday on suspicion of instructing the firm’s accountants to misappropriate the reserve funds of the firm’s employees.

The Osaka prefectural police also arrested Toshihiko Murata, a former deputy manager of Nova’s accounting department and a former president of Nova Kikaku, a Nova Corp. affiliate Sahashi owned, suspecting he was Sahashi’s accomplice.

The police learned that Sahashi, who was under pressure to return school fees to students who canceled their enrollment without finishing all the lessons, had told his subordinates that the public’s anxiety over the school’s management would quickly spread unless the school fees were refunded.

The police suspect Sahashi took the initiative in misappropriating the funds as he feared the school’s operations were at risk.

According to the police and others, Sahashi, 56, and Murata, 49, allegedly colluded to instruct a Nova accountant on July 20 to transfer about 320 million yen of the funds to a Nova Kikaku bank account he once managed.

Sahashi partially has denied the allegations, while Murata has admitted the allegations.

http://www.yomiuri.co.jp/dy/national/20080625TDY01303.htm

Sahashi grilled over misuse of ¥320 million in worker benefits

The Osaka Prefectural Police served the warrant for the alleged embezzlement after questioning the 56-year-old Sahashi on a voluntary basis starting in the morning.

Sahashi, who headed what was once Japan’s largest English-language school chain, is suspected of diverting the ¥320 million in reserve funds, set up specifically for employee benefits, last July 20 to Nova through an affiliate firm that he effectively owned.

Nova faced a liquidity crunch after the government ordered it to suspend some of its operations last June for allegedly lying to prospective clients about tuition charges and also faced lawsuits by clients seeking tuition refunds.

In October, a labor union that includes non-Japanese Nova instructors requested that labor authorities build a criminal case against Sahashi and others at Nova.

Nova’s board sacked Sahashi and the company filed for corporate rehabilitation.

Some Nova schools have been taken over by G.communication Co., based in Nagoya.

Established in 1981, Nova at one point had 300,000 students and employed about 4,000 foreign instructors

http://search.japantimes.co.jp/cgi-bin/nn20080625a1.html

Failed English conversation school chain Nova Corp. and its sacked president Nozomu Sahashi are poised to face charges for not paying wages to about 400 employees, according to the Osaka Labor Bureau.

Bureau officials are set to send documents to prosecutors accusing the company and its former president of failing to pay about 105 million yen to around 400 staff, mainly foreign language instructors and Japanese support staff.

Excluding cases involving unpaid overtime or severance pay, the amount the bureau accuses Nova of failing to pay is unsurpassed in an instance where criminal responsibility has been pursued.

Sahashi, 56, denies deliberately intending to withhold wages, but labor bureau officials strongly believe he continued to force the conversation school chain to operate when there was no realistic chance of being able to pay employees. Including sums due for assistance after Nova collapsed in October last year, it is estimated that Nova owed employees 4.1 billion yen, and the figure would be greater if severance pay were included.

The Japan Labor Health and Welfare Organization is a government-run body that pays workers up to 80 percent of their wages (up to a limit of 2.96 million yen a month) if their employer goes bankrupt and fails to pay them what they are owed. The organization said that as of the end of May, there have been requests for payouts from 6,921 former Nova employees to the sum of 2.91 billion yen. Payouts of 2.85 billion yen have been made to 6,751 former Nova workers.

http://mdn.mainichi.jp/national/news/20080624p2a00m0na004000c.html

Police on Tuesday arrested the founder of Japanese language school Nova on embezzlement allegations, capping the fall of a businessman whose company had hundreds of thousands of students.

Police in the western city of Osaka arrested Nozomu Sahashi, the founder of what was Japan’s largest chain of language schools until last year, on suspicion of embezzlement, a police spokesman said, declining further comment.

Sahashi was accused of misusing 320 million yen ($2.97 million) from a benefits fund set up through employee contributions.

Sahashi admitted using the funds but denied any wrongdoing, saying the money went to refund students who had cancelled their contracts.

“I would like employees to know that I used the money for the company,” Sahashi said in a statement released Tuesday morning. “I did not spend a single penny of the company’s funds for my private purposes.”

Nova’s collapse began last year when the government ordered it to halt part of its operations as punishment for insufficiently refunding students.

The controversy triggered a flood of students cancelling their own lessons, leading the company to file for bankruptcy protection.

“We hope the arrest will lead to clarifying the cause of the bankruptcy,” lawyers in charge of the company’s accounting in the bankruptcy said in a statement.

“We will study the possibility of filing civil cases against former president Sahashi,” they said.

Sahashi established Nova in 1981, tapping into a Japanese passion for language study by setting up schools with trademark blue-and-yellow signs across major cities.

Before its collapse, Nova had an estimated 400,000 students and 6,000 employees, some 4,500 of them foreigners. Many teachers were young people looking to spend a few years in Japan.

Some foreign teachers offered to give lessons for food after Nova’s collapse left them unemployed in one of the world’s most expensive countries.

A number of Nova schools have been taken over by G.communication Co., which is based in the central city of Nagoya.

http://newsinfo.inquirer.net/breakingnews/world/view/20080624-144559/Police-arrest-founder-of-Japans-top-language-school

The labor ministry’s regional bureau in Osaka is planning to send information to prosecutors possibly later this week on Nozomu Sahashi, former president of Nova Corp., on suspicion of nonpayment of wages to language instructors, sources said Monday.

The Osaka Prefectural Police are separately planning to launch investigations to build a criminal case against Sahashi, 56, for alleged embezzlement of fringe benefit provisions for employees at what was once the largest English-language school chain in Japan, the sources said.

According to the sources, the allegations by the labor bureau concern a total of around ¥100 million that should have been paid last September and October to around 400 instructors and staff members nationwide who worked for now-bankrupt Nova.

The amount represents one of the largest cases of nonpayment of regular wages ever.

However, the allegations constitute only a part of wage nonpayment at Nova. During the two-month period, it is known that around 8,000 employees did not receive salary payments totaling ¥1.8 billion.

The unpaid wages are thought to be as high as ¥4.1 billion in all if the period after October, when Nova went bust, is included.

http://search.japantimes.co.jp/cgi-bin/nn20080624a3.html

Police are poised to begin an investigation into former Nova Corp. President Nozomu Sahashi upon suspicion of embezzlement, sources said.

Sahashi used a mutual aid society for Nova employees to transfer about 320 million yen from the employees’ welfare fund into a Nova account in July last year.

Nova was on the brink of collapse at the time and it is believed that the money was used to refund students who canceled their contracts with the English conversation school chain before they had expired, and without the knowledge of employees.

In July last year, the bank account of the employees’ aid society had a balance of about 320 million yen. In the middle of the month, that money was transferred to Nova Kikaku, a Nova affiliate also headed by Sahashi. Later the same day, the money was transferred from the Nova Kikaku account to an account in the parent company’s name. Money from the Nova account was used to refund students who had cancelled their contracts.

Police said they believe Sahashi ordered the company’s accountant at the time to move the money around.

http://mdn.mainichi.jp/national/news/20080623p2a00m0na009000c.html

The Osaka Prefectural Police will soon open a criminal investigation against the former president of failed language-school chain Nova Corp. on suspicion of embezzling a ¥320 million special employee welfare fund, sources said Sunday.

Nozomu Sahashi is suspected of ordering the accounting staff at the Osaka-based firm to transfer all of the money in the fund to a company account on July 20, 2007.

He allegedly used the money to refund students who canceled lessons after the school was ordered by the government the previous month to suspend part of its business over exaggerated advertisements, the sources said.

The company set up the special fund for congratulatory or condolence payments for employees by collecting about ¥2,000 a month from the pay of each employee, according to other sources.

The special fund was managed separately from the company’s accounting, they said.

The company reportedly paid out a total of ¥530 million to reimburse students, according to the sources.

A former Nova board member said he believes a substantial amount in the special fund had long been used as company operating money.

“Even the board members did not know where the money actually went. Part of it may have been used as a slush fund for the president,” he said.

http://search.japantimes.co.jp/cgi-bin/nn20080623a2.html