The Osaka Labor Bureau sent papers to prosecutors Monday on failed English language school operator Nova Corp. and its former president, Nozomu Sahashi, on suspicion of violating the Labor Standards Law for failing to pay wages to Nova workers.
According to the bureau, Sahashi, 56, is suspected of failing to pay 105 million yen in wages to 400 Nova workers.
Among the 400, 134 were Japanese staffers who did not receive salaries for September, totaling 33 million yen, and 266 were foreign instructors who received no wages for October, totaling 72 million yen.
Sahashi has claimed his failing to pay wages is not a violation of the law. He was quoted by labor officials as saying, “I feel responsible as the [former] president of the company, but I did what I could do, like putting my own money into the business.”
Eikaiwa
Osaka Labor Bureau reports Nova Corp., ex-President Sahashi to prosecutors
Labor authorities have reported former Nova Corp. President Nozomu Sahashi and the English language school chain to public prosecutors for failing to pay their employees.
The Osaka Labor Bureau sent documents to the Osaka District Public Prosecutors Office on Monday accusing Sahashi, 56, and Nova Corp. of breaking Labor Standards Law.
According to the labor bureau, Nova Corp. failed to pay about 105 million yen in wages to 400 foreign instructors and Japanese employees at the school.
The amount and the number of victims are a record high for a case of unpaid regular wages, excluding overtime-work wages and severance payment.
Sahashi has admitted to not having paid the wages, but denies that he did it deliberately.
“I was busy raising money using my personal funds,” he told police.
According to police, in 2007 Sahashi failed to pay about 33 million yen in wages to 134 Japanese employees on Sept. 27, and around 72 million yen to 266 foreign instructors on Oct. 15.
Sahashi has already been arrested for embezzlement in the conduct of business for allegedly misappropriating a massive sum from the employees’ welfare fund.
http://mdn.mainichi.jp/national/news/20080701p2a00m0na019000c.html
Nova ex-president Sahashi says he was solely responsible for embezzlement
Disgraced former Nova Corp. President Nozomu Sahashi has admitted that he was solely responsible for misappropriating money from the coffers of an employees’ welfare fund, police sources said.
Sahashi, 56, who was arrested for embezzlement in the conduct of business after he was found to have misappropriated about 320 million yen pooled in a Nova employees’ mutual aid fund, had initially denied part of the allegations. However, he later told police, “I instructed everything,” admitting to the charges.
Osaka Prefectural Police also found that Sahashi was keeping track once a month of the remaining amount of money in the account of Shayukai — the mutual aid society of Nova employees — by having the amount reported to him. Police will further question Sahashi over the case, suspecting that he misused the money pooled in the Nova employees’ welfare fund for his own use.
In July last year, Sahashi allegedly transferred about 320 million yen from the Shayukai account into an account of Nova Kikaku, an affiliate of Nova. The money was later transferred to a Nova account. Investigators suspect that Sahashi attempted to launder money by transferring the funds.
In a related development, investigators suspect that Sahashi had also previously misappropriated money from the employees’ fund. In around 2005, he used about 10 million yen from the fund for the medical treatment of a Nova board member who was hospitalized at the time, as well as a total of several millions of yen for a year-end party and other expenses, police said.
http://mdn.mainichi.jp/national/news/20080627p2a00m0na009000c.html
NOVA funds recorded as loan to president
Reserve funds for employees of failed language school chain Nova Corp. that had been transferred into an account for refunding student fees were recorded as a loan to its former president, Nozomu Sahashi, who is under arrest for misappropriating the funds, police said Wednesday.
The Osaka prefectural police believe Sahashi instructed a Nova accountant to falsify the purpose of the transfer as being “to cover refunds for students who cancelled their enrollment before finishing all programs” so he would not be blamed for the misuse of the funds.
The accountant recorded in a ledger for the reserve funds that the money was loaned to Sahashi from the mutual aid association.
However, there was no document to certify that the money was loaned by contract to Sahashi by the association.
At that time, Sahashi had personal assets, including bank accounts and property, worth several hundred millions of yen. The police believe he had no intention of repaying the money to the association.
[Nozomu] Sahashi and [Toshihiko] Murata [former deputy manager of Nova’s accounting department who was also arrested on a similar charge] were sent to the prosecutors office on Wednesday afternoon. The police will continue searching locations related to the suspects.
1 billion yen unaccounted for at Nova
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
Police say ex-Nova boss hoarded riches on brink of bust
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
Ex-Nova head arrested over misused funds ‘320 million yen used to refund tuition fees’
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.
Former Nova chief arrested
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
Nova, fired president face charges over unpaid wages
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 arrest founder of Japan’s top language school
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.