Several companies in various industries, including retail firms, have offered capital and business alliances to Nova Corp., the nation’s largest English language school chain, Nova President Nozomu Sahashi said in an interview with The Yomiuri Shimbun Friday.Sahashi said Nova, which was ordered by the Economy, Trade and Industry Ministry to suspend part of its operations following the discovery of violations of the Specified Commercial Transaction Law, was considering all offers. “We are considering the offers because trust in us has to be restored,” he said.
Nova has reportedly seen its sales drop sharply following the ministry’s order, which limits the number of new contracts the company can receive. One option the company is considering to meet financial demands is selling off properties and real estate in Osaka estimated to be worth several billion yen.
Concern is growing among Nova students because the company was ordered Wednesday to suspend recruitment of customers for long-term contracts. It was also decided Friday that the company would be excluded from governmental benefits for education programs, as of Wednesday.
“I’m uncertain as whether we’ll be able [to regain the public’s trust] through our efforts alone,” Sahashi said. “If we get a good business partner, we may be able [to regain trust] earlier.”
Though Sahashi admitted that several firms in various industries had offered to form partnerships with Nova, he rejected the possibility of a business affiliation with another English school. “Other English conversation schools wouldn’t help us to regain the public trust, and we couldn’t expect any benefits from such a partnership, either,” Sahashi said. “I don’t want to tie up with a fellow trader.”
The president was upbeat regarding Nova’s finances, which are expected to drop due to a lack of new student contracts and the likely cancellation of current ones. “There’s no problem, and we don’t need the support of finance organizations, either,” Sahashi said.
Since Nova was inspected by the ministry and the Tokyo metropolitan government in February over its violation of the law, several firms have approached the company with offers of business alliances.
According to one source, a large retailer had discussed a possible business affiliation with Nova through a fund, but gave up on the plan because the two companies could not agree on the conditions. Another retailer, however, reportedly is still interested in a business alliance.
While Nova grew rapidly because of its “ekimae ryugaku” model of operating schools near stations, the firm was in the red in its consolidated account for fiscal 2005 and 2006, affected by a reduction of central government benefits for educational programs.