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.
Eikaiwa
Ex-Nova boss Sahashi facing embezzlement probe
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
Ex-Nova chief faces criminal investigation
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.
Nova ‘paid bills with employee welfare fund’
About 300 million yen contributed by employees of the bankrupt language school chain Nova Corp. to a staff welfare fund was transferred to a company bank account in July to cover operating costs and done without the approval of employees, the police have said.
According to the police, former Nova president Nozomu Sahashi ordered the transfer of the entire balance of the fund to a Nova business account to allow the payment of refunds to students who had canceled contracts with the financially troubled firm.
The police are investigating the case as possible embezzlement in the course of business by Sahashi, who owned the affiliate firm that handled the money transfer.
According to sources close to Nova and the investigation, Nova employees made monthly contributions from their pay to fund a mutual aid organization that covered the costs of business trips and occasions of congratulations or condolence.
Held in a bank account, the fund was managed by an employee in Nova’s accounting division. The fund was rarely used and had an accumulated a balance of 300 million yen.
Last June, Nova was ordered by the central government to partially suspend its operations due to illegal business acts, including giving misleading sales pitches and making exaggerated claims in advertisements.
Berlitz Striking Teachers Make History
The Berlitz General Union Tokyo (Begunto, a local of Nambu) maintained and expanded its 2007 shunto strike during this year’s shunto, focusing on two demands: a 4.6% across-the-boards base pay hike and a one month bonus.
Nearly half of all 46 Berlitz schools in the Kanto plain have been hit by walkouts since the dispute began last December. Over 55 teachers have joined in the time-fixed, volunteer strikes, making it by many accounts the largest enduring work stoppage in the history of Japan’s language industry.
“What we have discovered to our surprise and delight and to management’s chagrin is that many employees are joining the union just to participate in the strike,” said Begunto case officer Louis Carlet. “The strike is the best unionizing tool we have ever had.”
Another crucial point is that while most language school labor disputes aim to maintain or protect working conditions or employment, this strike is “aggressive rather than defensive in that we are fighting for a raise,” notes Begunto Vice President Catherine Campbell.
The union has also held several rowdy, boisterous pickets at several schools around the region, even at non-striking schools, urging coworkers to do the right thing. Check out a video of one such action:
Jack London’s scathing “definition of a scab” also hangs on the union board at most Kanto schools. Finally, some Kanagawa strikers created a rap song specifically about our 2008 shunto fight:
As parent firm posts record profits, Berlitz teachers strike back
“Benesse boasts openly on its Web site about the success of its ‘Language Company’ sector, mentioning Berlitz Japan in particular,” notes longtime Berlitz teacher and Begunto (Berlitz General Union Tokyo) Vice President Catherine Campbell.
The language teachers of Begunto didn’t need a math class to put two and two together, and in April 2007 they began “shunto” (spring) negotiations for a “base-up” raise and bonus.
As the time of writing, at least 55 teachers have conducted “spot strikes” at at least 16 Berlitz schools, most of these in greater Tokyo. Begunto says it is encouraged by the response: Some French and Spanish teachers have walked out, and several more teachers have joined the union. That adds up to teachers walking out of 275 lessons in the greater Tokyo area, at large schools in Ikebukuro and Akasaka as well as suburban locations such as Seijo Gakuen, Atsugi and Kashiwa.
Louis Carlet, Deputy Secretary General of the National Union of General Workers [Tokyo Nambu], Begunto’s parent union, writes that Berlitz has been forced to “spend massive amounts of money and resources sending ‘shadows’ to cover the classes of potential strikers with strikebreakers.”
Ex-Nova teachers face firings half year on
Foreign and Japanese employees hired by Nova Corp.’s successor complained of unreasonable dismissals and pay cuts Saturday as they marked the half-year anniversary of the giant language school’s collapse.
Nagoya-based G.communication said it had hired about 1,400 foreign instructors by the end of December, but that about 400 of them had quit by the end of March.
G.education operates 169 language schools across Japan under the Nova name. Before going bankrupt, Nova was the biggest English language school chain in Japan.
Ex-NOVA teachers file complaint about getting laid off by new owners
About 20 foreign language teachers formerly employed by NOVA Corp. filed a complaint with a labor standards inspection office here on Friday, claiming that they were illegally fired by the companies that took over the failed language school chain.
“Unfair dismissal!” chanted the former NOVA teachers as they joined a prep rally held by [Tokyo Nambu sister union] the General Union in front of the Osaka Chuo Labor Standards Inspection Office in Osaka’s Chuo-ku on Friday before they filed the complaint with the office.
Nagoya-based G.communication Group bought out NOVA after it filed for protection from creditors in October last year, leaving NOVA under bankruptcy proceedings.
However, G.communication Group fired about 800 former NOVA teachers at the end of December, overturning an earlier agreement in November that the company would in principle hire all the former NOVA teachers who wanted to work for the new employer, according to the General Union.
Furthermore, the company refused to renew employment contracts for about 200 other teachers, leaving more than 1,000 teachers unemployed. The dismissed teachers claim that the company violated the Labor Standards Law.
“The company violated the law in that it did not sign employment contracts with the teachers when they started working in November. The company’s dismissal procedures also breach the law in that it notified the teachers of their dismissal via e-mail and without notice,” said a representative of the General Union.
http://mdn.mainichi.jp/national/news/20080215p2a00m0na014000c.html
Police targeting ex-Nova president
Police are investigating the former president of the now-bankrupt language school chain Nova Corp. for possible breach of trust over a project that brought profits to an affiliate he controlled, sources said.
Nozomu Sahashi, 56, is suspected of having paid exorbitant prices for a server used in video-phone hookups for language lessons, sources said.
Police suspect he used his position to reap profits for his affiliated company, although the deal resulted in about a 500-million-yen loss to Nova, the sources said.
Investigators are trying to determine if Sahashi can be held for aggravated breach of trust stipulated under the corporate law, they said.
http://www.asahi.com/english/Herald-asahi/TKY200802130084.html
Paper scandal points to shortcomings of Japan Inc
Corporate governance is a relatively new concept in Japan, the world’s second-largest economy.
It ranks 38th out of 49 nations, lagging behind South Africa, Venezuela and Peru, according to GovernanceMetrics International, a corporate governance ratings agency.
The scandals come on top of what analysts see as insular management styles in Japan and an insufficient number of outside directors.
Japan’s Nikkei benchmark average was the worst performing index among among major stock markets in 2007.
Restructuring and economic malaise in the late 1990s and early 2000s, as well as the erosion of Japan’s lifetime employment system weakened employee loyalty, giving rise to whistleblowers as well as making consumers more outspoken.
The paper scandal, which has enveloped other major domestic paper makers, was revealed by a whistleblower, said TV broadcaster TBS which broke the news.
It follows cases where firms sold food past its expiry date — mostly by small firms but also affecting McDonald’s Japan, which said some of its stores may have done so.
Staffing agency Goodwill Group Inc suspended on Friday all its branch operations for several months — a government penalty for breaching employment regulations when it sent out temporary workers out. It also withdrew from nursing care services last year after it inflated staff numbers.
Other high-profile scandals last year included the failure of Japan’s biggest English language school chain Nova, after fraudulent advertising.
“There have been so many scandals, I guess there are worries about what industry is going to be next,” said Takeo Omura, a corporate governance analyst at the Daiwa Institute of Research.