Nova may seek charges against Sahashi

Nova may file criminal charges against former President Nozomu Sahashi over questionable transactions between the failed foreign-language school chain and a firm he effectively ran, court-appointed administrator Toshiaki Higashibata said Tuesday.

He also said Sahashi, who was ousted by Nova’s board of directors last week, had contacted him and implied he would challenge the board’s decision.

According to Higashibata, Nova Corp. bought videophone equipment from Ginganet Co., an Osaka-based firm effectively controlled by Sahashi, and sold the devices to students at prices several times above cost.

Nova paid Ginganet ¥8.2 billion for the equipment over a five-year period dating from 2002, he said.

“We understand there was a scheme to funnel money” from the students to Osaka-based Ginganet by way of Nova, Higashibata said, noting Sahashi could face aggravated breach of trust charges.

He also revealed that Sahashi, one of Nova’s cofounders, sold all his shares in two firms effectively under his control ? including Ginganet ? to one person around the time Nova filed for protection from creditors on Oct. 26.

Earlier Tuesday, Nova said the equity stakes held by Sahashi and his family fell sharply in the April-September half for unknown reasons.

As of Sept. 30, Sahashi and an Osaka-based firm fully owned by him and his family held a combined 20.2 percent of Nova’s total voting rights, compared with 72.6 percent as of March 31.

Nova said it did not know what instigated the sudden change. Sahashi’s failure to notify financial authorities, however, may have violated the financial product transactions law.

Sahashi was fired by Nova’s board of directors in absentia on Oct. 25, and his whereabouts remains unknown.

But Higashibata said Sahashi contacted him via a lawyer Tuesday afternoon and suggested that he would legally challenge the board’s decision to remove him as president.

Other tidbits revealed at the news conference include the revelation that Sahashi received about ¥310 million in executive salary for the business year to March 2006, the year Nova recorded a loss of about ¥3.1 billion ? its first ever.

On Tuesday, Higashibata also let the media peek inside Sahashi’s opulent suite on the 20th floor of Nova’s administrative headquarters in Osaka.

“We are showing this as an example of his (Sahashi) calling the company his own,” he said.

The 330-sq.-meter executive suite has a red-carpeted reception room, a luxurious private dining and living area with large-screen TV, a bathroom with a sauna, a tea room and a room with a double bed.

Nova was paying ¥2.7 million a month to rent the suite, which cost ¥60 million to ¥70 million to furnish and decorate, Higashibata said.

Nova filed for bankruptcy under the Corporate Rehabilitation Law with a debt estimated at about ¥43.9 billion as of the end of July, and two administrators appointed by the Osaka District Court are searching for sponsors to help turn it around.

Higashibata said Nova is negotiating with interested companies but did not identify them.

Nova spoke in Tokyo with one firm Monday and with two companies in Osaka on Tuesday, he said, adding that others have offered support or showed willingness to take over some of its operations.