On Saturday, meetings were held across Japan for Nova Corp. instructors and staff, to provide information about the sponsor’s plans for the future.
Given the short notice (about two days), there was an impressive turnout at the meeting I went to, one of two held at Nova’s office in Shinjuku.
A large number of the around-400 attendees were in suits and ties in anticipation of interviews planned for after the session. However, G.communication decided not to go ahead with the interviews on the day, which suggests that the high head count had taken them by surprise.
First to speak was Noriaki Takahashi, one of the court-appointed trustees, who explained the decision to choose G.communication from about a dozen potential sponsors.
“We evaluated all the offers fairly,” he explained, “and we came to the conclusion that the offer from G.communication was the best that was put forward.”
Where other proposals had offered only limited re-employment, “all instructors and staff who want to be employed will be employed, following a short interview,” said Takahashi.
A “Request for Employment” form handed out at the meeting states that “Even if there is no Nova school in your desired area of employment and you end up standing by at home, your salaries will be fully paid,” and “your monthly income shall correspond to your final monthly income at Nova.” (Later, one instructor asked what would happen if more people applied than could be employed, but this question was put back, and eventually went unanswered.)
Another reason the trustees chose G.communication was to protect the students, Takahashi explained.
“There was not one company that was prepared to pay the cancellation refunds,” he said, referring to Nova’s multibillion-yen debt.
Other companies offered only to waive their entrance fee, or to allow free study for a limited time, so the trustees felt “the offer to honor 100 percent of the lesson points at 25 percent cost was the best.”
Next, he spoke about unpaid wages. “Salary payments from G.communication will start on the day of employment with G.communication,” he said.
The outstanding salary payments were Nova’s responsibility, but examining Nova’s finances, the trustees had found “there was not even enough money to run the company for one day.”
Apparently, Nova had a small fund set aside, which will be used to cover a small proportion of the outstanding wages. The rest will need to be claimed from the government after Nova is declared officially bankrupt, likely in around two weeks, though the large number of claimants means the process may well take up to six months. Those leaving Japan were asked simply to leave their contact details, as they wouldn’t be able to rely on assistance from the Japanese embassies in their home countries.
The stage was then taken by Masaki Inayoshi, owner of G.communication, who explained his reasons for stepping in as sponsor.
“I wanted to accept this challenge,” he said. “This was the main reason for making this decision.”
He expressed surprise at the scale of the operation he has taken on, and quipped about the size of the hidden room in former Nova boss Nozomu Sahashi’s Osaka suite, getting one of the few laughs of the afternoon.
So, are the dark clouds finally being cast aside? Perhaps not, especially for those leaving Japan, but the future is becoming at least a little clearer.
Nova
Long-term prepaid tuition comes undone
The business failure of Nova Corp.–the nation’s largest English-language school chain–left about 300,000 students in the lurch. This raises the question of how customers can be better protected when a business goes belly-up.
G.education Co., a Nagoya-based cram school operator, will take over Nova businesses, which last month filed for court protection from creditors under the Corporate Rehabilitation Law.
Nova’s students are extremely unlikely to see any of the more than 40 billion yen that they put down for prepaid tuition. Nova had 670 schools nationwide. But G.education will take over up to 200 of Nova’s schools, and only 30 will be reopened this week.
Nova’s students have been hung out to dry. The risks of the prepaid tuition system that has become the norm in the industry have become all too evident. The government and related industries must set about creating a system in which customers can learn without worrying about whether their money will go down the drain.
Tuition fees are paid to a business operator in return for services received. When the operator cannot provide these services, prepaid tuition fees should be entirely refunded.
===
Shifty calculations
In Nova’s case, the more lessons a student paid for in advance, the larger the discount they could receive. But when a student tried to cancel a contract, Nova settled the cancellation by using a higher unit price per lesson than when the contract was signed, thereby reducing the amount it had to repay. In April, the Supreme Court ruled Nova’s settlement method was illegal.
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 due to its exaggerated advertisements, and for other reasons.
As the alarm bells began ringing louder and louder, as many as 100,000 students canceled their Nova contracts.
However, Nova was unable to meet the refund requests. The company had only about 1.8 billion yen in a reserve fund to cover an expected loss at the end of last business year.
The advance payment system is common practice not only at English language schools, but also at aesthetic salons and cram schools. Tuition fees paid for in advance are used for business operating costs, including salaries for lecturers and staff, rent for classrooms and office expenses.
===
Preparing for the worst
A case like Nova was just waiting to happen, albeit perhaps on a smaller scale. To help prevent a repeat, related business industries should consider pooling a certain amount of money from students’ advance payments.
Some observers have proposed a fiduciary refund preparation scheme be established in cooperation with financial institutions, in which a certain amount of money from advance payments is managed separately from the operator.
An industry organization for foreign language schools has a self-regulatory rule to keep a contract for classes to less than one year. However, Nova set the term of its contracts for up to three years, as it did not belong to the organization. This was one major factor behind the sheer scale of losses suffered by students who paid in advance for their classes. This issue should be carefully examined.
Leaving this rule to the discretion of business operators and the industry will do little to dispel anxieties whipped up by Nova’s demise.
The Economy, Trade and Industry Ministry should actively be involved in formulating an industry guideline and other necessary measures.
From the viewpoint of protecting customers, measures allowing administrative punishment to be dished out if necessary also should be introduced.
NOVA students form support group
Students of failed English conversation giant NOVA Corp. have formed a support group, and are urging others to join them.
The NOVA Seito no Kai was formed over the weekend by students of the failed chain.
Organizers say they aim to work collectively to negotiate with NOVA’s apparent savior, Nagoya-based company G.communication grp. and the Ministry of Economy, Trade and Industry to ensure they are treated fairly by the failed company’s new operators.
G.communication grp. has promised to allow students to take classes they had paid NOVA for, as well as to offer jobs to the failed chain’s teachers.
The NOVA students’ support group is calling on all students involved with the English conversation chain to join its ranks, including those who were fighting the company over refunds for canceling contracts before they had been completed.
http://mdn.mainichi.jp/national/news/20071112p2a00m0na014000c.html
G.communication set to reopen Nova school in Nagoya
G.communication Co., due to take over part of the business operations of failed language school operator Nova Corp., plans to reopen a Nova school in Nagoya as early as this weekend, company officials said Sunday.
The Nova Kurokawa school in Nagoya’s Kita Ward would be the first Nova school to be reopened by G.communication, a Nagoya-based operator of cram schools, language schools and restaurant chains.
The company is looking to reopen 30 schools by the end of this month, the officials said.
G.communication is expected to reemploy Nova staff and foreign instructors at the Kurokawa school, the officials said. The company briefed Nova employees and foreign teachers [whpo are also employees] about their reemployment on Friday and Saturday.
The company has apparently decided to reopen the school due to its proximity to the company’s head office and its large scale of operation.
The acquisition of Nova operations will be conducted through G.communication’s wholly owned subsidiary, G. Education Co., which runs a chain of 42 English conversation schools under the “EC Inc” brand.
The company is also aiming to run schools elsewhere including in Tokyo, Osaka, Sendai and Fukuoka, and is already in negotiations with landlords in order to restart operations, the officials said.
G.communication also said it will rebrand its EC school in front of Nagoya Station as Nova.
Nova, based in Osaka, filed for court protection from creditors Oct. 26 under the Corporate Rehabilitation Law after the scandal-tainted company gave up on attempts to revive its business.
Nova students form group, vow to take action
About 70 former students of bankrupt language-school Nova Corp. launched the Nova Students’ Association on Saturday to organize the abandoned pupils.
“Former students have been left out,” said Joji Yamabuki, 44, head of the group. “We would like to gather as many students as possible to take a joint action.”
Following its establishment, the group submitted a list of requests to Nova’s court-appointed administrators, asking them to disclose the details of how G.communication grp. was selected to takeover some of Nova’s operations.
The group said it plans to hold another meeting Nov. 16 in Chuo Ward, Osaka, to gather and disseminate more information about Nova.
Meanwhile, Nova held separate meetings for its former employees and teachers in 22 prefectures to explain their employment conditions and how to apply for unpaid salaries.
In the Tokyo meeting, officials also distributed job applications for G.communication.
According to Nova officials, a total of 2,300 people attended the meetings in Tokyo and Osaka. Masaki Inayoshi of G.communication also attended one of the meetings.
Nagoya-based G.communication has said it will take over 30 of Nova’s schools.
NOVA impresario used palatial presidential penthouse to pork the pick of his staff
Nozomu Sahashi, the ousted president of NOVA Corp., was getting into some bunnies a bit different to the stuffed toy symbol of the struggling English conversation school chain, Sunday Mainichi (11/18) says.
Sahashi, 56, had decked out a secret room attached to the President’s Office at NOVA headquarters in Osaka’s Naniwa-ku with a Jacuzzi, sauna and double bed in a room decorated every bit as gaudily as the tackiest of love hotels.
Receiver Toshiaki Higashibatake opened the room to the media to show the world just how much Sahashi was using the publicly traded NOVA as his own personal company, including using the chain to fund the 70 million yen it cost to set up his secret love nest, as well as the 2.7 million yen a month in rent that came with it. NOVA was also forced to foot the bill for a similar love palace for the ex-president in Tokyo, all the while failing to pay thousands of its employees’ wages and rent.
“Former President Sahashi started using this (Osaka) office from about 2002,” a NOVA spokesman tells Sunday Mainichi.
From about the same time, NOVA’s finances began taking a turn for the worse. By its settlement of accounts at the end of March this year, it was 3.1 billion yen in debt. NOVA owes 4 billion yen in unpaid wages and has already received payment from students in the vicinity of 40 billion yen for lessons it has not yet provided. Sahashi, though, has no such money worries. In 2005, he took home an annual salary of 300 million yen. And last year also pocketed a pay packet of 150 million yen.
Sahashi had a liking for bunnies that went beyond the NOVA bunny he created to become the symbol of the company.
“He’d take a gorgeous secretary with him every time he went to some big meeting or party. He used secretaries who had once been top nightclub hostesses in Tokyo’s Ginza and Osaka’s Kita. They were all gorgeous women, every bit as attractive as showbiz idols or models,” a former NOVA executive tells Sunday Mainichi. “He had his favorite foreign teachers and picked out several women for serious relationships; I suppose that’s what he used to use the secret room in the president’s office for.”
In the early days of NOVA, back in the first half of the 1980s, Sahashi was apparently notorious for housing his hostess lovers in dormitories he had set up for foreign teachers at his company’s schools.
“He broke a lot of hearts, of both Japanese and foreign women,” says a resident of the area where Sahashi’s lovers used to be shacked up. “He used to get sick of women pretty quickly and would soon find new love. We were always hearing him screaming out in lover’s tiffs.”
Despite his failings, some within Japan’s McEnglish industry acknowledge Sahashi had his successes.
“He was certainly an ideas man,” an industry insider says. “At a time when the market rate for classes was 10,000 yen a lesson, he was able to provide classes for under 2,000 yen a pop, which really drew in customers. He was also a big supporter of youngsters, having employed lots and lots of very young teachers.”
Sahashi also oversaw NOVA as it grew from being a tiny Osaka conversation school that grew to become a nationwide chain far larger than any of its competitors. The NOVA bunny, in its early days at least, also proved to be a tremendous financial success for the company because of its outstanding merchandising sales, and was another Sahashi creation.
But the Osaka Prefecture native son of school teachers also received plenty of help along the way. One of the prime reasons was indirect government backing through a national program to encourage working people to study.
“This program subsidized 80 percent of the cost for those who decided to attend an English conversation school,” a business journalist tells the respectable weekly. “In effect, this was our tax money. Which means that taxpayers’ hard-earned cash was ending up in Sahashi’s pockets.”
As the NOVA empire crumbled around him and his board let loose with the ax, Sahashi was rumored to have fled overseas to avoid possible prosecution or retribution, but it appears he is actually still in Japan.
“According to a lawyer for the former president, he is spending his time traveling back and forth between Tokyo and Osaka,” a NOVA spokesman tells Sunday Mainichi. “We have still yet to be able to talk directly with him.”
http://mdn.mainichi.jp/culture/waiwai/face/news/20071109p2g00m0dm004000c.html
Nova staff briefed on details of new job offers
Failed English-language school chain Nova Corp. held briefings in Tokyo and Osaka on Friday for about 200 of the firm’s management-level employees, detailing the procedures required to gain reemployment with G.education Co.
Interviews for the firm’s employees wishing to work for G.education, based in Nagoya, which will take over Nova’s operation, were also conducted by Nova in Tokyo and Osaka the same day.
Nova will offer further interviews to about 4,900 nonmanagerial employees and foreign teachers on Saturday at about 20 locations.
English teachers feel abandoned after Japanese giant collapses
For years Japan has welcomed English teachers such as Kristen Moon with open arms to fill its many language schools but when industry giant Nova collapsed they found themselves on their own.
Critics say the fiasco has exposed the lack of an adequate safety net for foreign workers in Japan, even as the world’s second-largest economy gradually opens its doors to overcome a shrinking workforce and an ageing population.
Moon arrived in Japan little more than six months before the nation’s largest foreign language school filed for bankruptcy protection last month, leaving thousands of foreign teachers without jobs or pay.
Concerned for her welfare, Moon’s students asked her to keep teaching them outside of the school and took her out for dinner and karaoke.
Their generosity almost made up for the problems, she said, while sipping a coffee at a cafe in Ichikawa, on the eastern outskirts of Tokyo.
“I feel my cultural contribution to Japanese society through the teaching of English is valued by individuals, but the government has exploited this need and led to companies earning huge profits,” she said.
Moon, a 23-year-old American, is one of about 4,500 foreign teachers left jobless after the collapse of the language school.
About 2,000 Japanese workers were also left without jobs while an estimated 400,000 students were affected.
Teachers’ hackles were raised further when local media showed the former Nova president’s plush executive suite at the company’s headquarters in Osaka complete with a dining room, bathroom with sauna and Japanese-style tea room.
The teachers, most of whom paid for their flights to Japan themselves and who find themselves without work or health insurance are now desperately trying to find new employment.
Some cannot afford a plane ticket home while others are offering individual lessons.
Despite the hardships, there is some hope for the teachers.
Nova’s lawyers said Tuesday that Japanese firm G.communication, which runs English classes in northern Japan, would start taking over the running of 30 Nova schools and try to manage up to 200, less than one-third of the total.
But, exhausted by anger and disappointment, some teachers are already packing their bags, giving up hope of getting the salaries they are owed.
“Because the company was telling us absolutely nothing, any new information was from the media, or from the union or gossiping amongst ourselves,” said Julie Pidgeon, 26, who plans to go home. “I was just sick of the limbo.”
Michelle Newton-Greene, 31, is also calling it quits.
“I’ve got to take some dignity home with me and start again,” she said.
Nova’s blue-and-yellow signs, which famously advertised an experience akin to “a study trip abroad”, are still dotted around Tokyo, but none of the hundreds of schools are open for lessons.
Teaching English was once a high-paying job in the country, drawing thousands of people from countries such as the United States, Britain, Canada and Australia, including many young people looking to spend a few years abroad.
As the Japanese economy stagnated in the 1990s and the yen became weaker, Nova began a more agressive teacher recruitment programme overseas, particularly through universities.
Moon said Japan’s laws need to be changed to make the country more welcoming to foreign workers.
She and her Australian colleagues feel that the collapse of Nova exposed lack of legal and social protection for foreign workers in Japan.
“Not just Nova staff but any foreign worker, whether they are Latin American construction workers or the women who make bento (lunch) boxes… they’ve all been exploited by their company,” Moon said.
“Often because there is a communication barrier and they cannot speak fluent Japanese, when something goes wrong, they are just fired. They don’t know the Japanese laws or the language and they are easily replaced.”
Japan has a tight immigration policy, restricting access to those with Japanese ancestors and skilled workers.
But with the population rapidly ageing and the birthrate dwindling, Japanese companies face a shortage of unskilled workers, which critics say has contributed to the exploitation of illegal foreign workers.
Goro Ono, a professor at Saitama University, said Japan has also been overly generous in granting work visas to Western English speakers and should have established better protection for teachers.
“If Nova had such a high risk of laying off foreigners, the government should have prepared for it with employment insurance,” he said.
“The question is, does Japan really want to host so many immigrants and have them as part of society?” he asked, adding that the answer was “no.”
Ono said teaching English in Japan was a type of immigrant labour. But Moon and her colleagues do not see themselves as the same as other immigrants.
“We can easily go back to our country whenever we choose,” said Moon, while Pidgeon added: “We are privileged. We are here by choice.”
http://afp.google.com/article/ALeqM5h25DO_2O_UNwdQdgDz1ayCy2-NxA
Nova schools to be reopened with new jobs, fee system
Nagoya-based G.communication Group will begin offering lessons at 30 Nova branches from next week, in the first stage of a plan to take over operations at 200 branches of the failed English-language school chain over the coming year, it was learned Wednesday.
G.communication will reopen the schools using the established Nova brand name and also plans to employ administrative staff and foreign teachers formerly employed by Nova.
G.communication, which operates language schools, restaurant chains and other businesses, was selected by preservative administrators of Nova Corp. to act as a sponsor company for operations of the firm.
G.communication’s wholly owned subsidiary, G.education Co., which operates cram schools, will undertake the operation of the former Nova schools.
During an interview with The Yomiuri Shimbun in Nagoya, Masaki Inayoshi, 38, chairman and president of G.communication Co., said the firm would offer explanatory briefings and interviews at venues across the nation on Friday and Saturday for former Nova employees and foreign teachers seeking reemployment.
The reopening of 30 schools precedes G.communication’s planned resumption of operations at 200 Nova schools, in stages, over a six-month to one year period.
Inayoshi indicated the firm would employ about 2,000 teachers and about 500 administrative staff under this plan.
The firm will abolish the system under which students paid tuition fees to Nova in advance, introducing instead a system in which students pay fees on a monthly basis.
The 30 schools G.communication has selected to reopen next week are all branches where Nova had offered lessons for both children and adults.
Former Nova teachers struggling to get by
Jessica Crichton, 23, and Hilary Keyes, 24, former teachers of failed language school chain Nova Corp., sat on the floor of their shared apartment in Nerima Ward, Tokyo, eating bowls of instant ramen–their first and only meal of the day.
“I can’t tell my mom in Canada about this situation,” Crichton said with tears in her eyes. After all, she came to Japan, she said, because she loves the country and its people.
About 4,000 teachers lost their jobs after Osaka-based Nova filed for court protection from creditors under the Corporate Rehabilitation Law on Oct. 26. The two were told on Oct. 11. to leave the apartment the firm rented for them. They moved to their new place on Oct. 20.
“Many former Nova teachers are being driven out of their apartments and are living in dire conditions,” an official of the National Union of General Workers Tokyo South Chapter said.
Nova teachers usually lived together in groups of two or three in shared apartments rented by the firm. Osaka resident Nik Shepherd, who came to Japan a year and half ago, is one of them. He lived together with two colleagues. Monthly rent of 53,000 yen was withheld from the salary of each. Currently, although the firm has failed to pay the rent, the landlord has been kind enough to allow the tenants to stay in the apartment.
“We’ve stopped eating out. We can cook at home for 200 yen per meal,” 26-year-old Shepherd said. He lives on his meager earnings from private English lessons.
“I was disappointed with [former Nova President Nozomu] Sahashi, but I love Japan,” Crichton said. She said she sometimes gets absorbed reading “Ugetsu Monogatari,” an anthology of 18th century ghost stories that one of her students introduced her to. Shepherd said he was eager to learn more about Japanese culture, such as ukiyo-e woodblock art.
Although the takeover of part of the Nova’s operations by a Nagoya-based firm has been decided, the future still looks cloudy for the former Nova teachers.
===
Students sore over tuition fees
Many Nova students expressed resentment Tuesday upon learning their tuition fees will not likely be returned after G.communication Group, a Nagoya-based language school chain operator, takes over some of the failed language school chain’s branches.
G.communication announced Tuesday it would not assume an obligation to return tuition fees paid by about 300,000 students to Nova.
During a press conference Tuesday night, Nova’s court-appointed administrators Toshiaki Higashibata and Noriaki Takahashi, who are lawyers, announced that G.communication was selected to take over part of Nova’s operations.
“The decision [taken by G.communication] will highly protect employees and students. I had the impression that the company was very generous,” Takahashi said.
G.communication will resume operation of 30 Nova schools at an early date. As for operations at about 640 remaining schools, the administrators are in the process of selecting schools to reopen, but could not say when they would make an announcement on the matter.
Meanwhile, G.communication President Takashi Ono said during the press conference that the school would accept all Nova employees who wish to work.
The company said it plans to do its best to support Nova students.
Tuesday’s announcement on the tuition fees had an impact on Nova’s students.
An 18-year-old college student who went to Nova’s Kichijoji school in Musashino, Tokyo, said she paid 900,000 yen in advance to Nova about two years ago, and that about 200,000 yen remained unused for lessons.
“I wonder whether I can take lessons or not if I pay additional tuition fees. I can’t believe [what] an English language school [says] anymore,” she said.
A 32-year-old female boutique employee said she attended the Meguro school in Shinagawa Ward, Tokyo, for 12 years. When she heard only 30 schools would be reopened for the time being, she hardened her face and said, “What will happen to the [Meguro] school? If the schools [to be resumed] are located far from my house, it will be hard to continue studying while working.”
A female company employee, 66, who attended the Ochanomizu school in Chiyoda Ward, Tokyo, said her advance payment of 315,000 yen for lessons remained unused.