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.
Nova chief may face unpaid wages charge
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.
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.
JCCI says Japan should accept unskilled foreign workers
Japan must accept unskilled foreign workers to resolve the serious labor shortage that is hitting small and midsize companies especially hard the Japan Chamber of Commerce and Industry said in a report released Thursday.
The report calls for admitting unskilled foreign laborers to the nation with no restriction on the types of jobs they can do, although it does lay out some requirements:
— The government will decide the number of workers to be accepted and issue a working visa valid for between three and five years.
— The government will monitor the status of the labor shortage in the manufacturing, agriculture, forestry and fisheries sectors as well as the nursing and welfare field.
— Candidates must pass a Japanese-language proficiency test in their home country and complete a training program to learn Japanese customs.
Currently, the country accepts unskilled foreign workers in principle only under a three-year training and technical internship program that comprises one year of basic job training and two years of practical on-the-job training.
The report points out the discrepancy emerging between the intended purpose of human resource development through basic and practical training, and reality in which many trained foreigners are actually [forced to work illegally] as unskilled laborers [and have their passports confiscated by their employers].
Kawasaki opens referendums to foreign residents
The Kawasaki Municipal Assembly enacted an ordinance Thursday allowing residents aged 18 or older, including foreigners who have lived in the city for three years or longer, to vote in referendums.
Kawasaki is taking a cue from Hiroshima, the first city to adopt a similar ordinance, Kawasaki officials said.
Referendums can be put forth by the mayor, the assembly or residents for “important matters concerning the municipal governance,” the ordinance says.
Foreigners aged 18 or older who are legally registered as Kawasaki residents for three years or longer are given the right to vote regardless of their nationality or their visa status.
As of the end of March, Kawasaki had around 1.122 million residents aged 18 or older. Of them, around 19,000 were foreigners.
Radical immigration plan under discussion
Foreigners will have a much better opportunity to move to, or continue to live in, Japan under a new immigration plan drafted by Liberal Democratic Party lawmakers to accept 10 million immigrants in the next 50 years.
“The plan means (some politicians) are seriously thinking about Japan’s future,” said Debito Arudou, who is originally from the United States but has lived in Japan for 20 years and became a naturalized citizen in 2000. “While it is no surprise by global standards, it is a surprisingly big step forward for Japan.”
The group of some 80 lawmakers, led by former LDP Secretary General Hidenao Nakagawa, finalized the plan on June 12 and aims to submit it to Prime Minister Yasuo Fukuda later this week.
The plan is “the most effective way to counter the labor shortage Japan is doomed to face amid a decreasing number of children,” Nakagawa said.
While establishing an environment to encourage women to continue to work while rearing children is important to counter the expected labor shortage, bringing in foreign workers is the best solution for immediate effect, said the plan’s mastermind, Hidenori Sakanaka, director general of the private think tank Japan Immigration Policy Institute.
“We will train immigrants and make sure they get jobs and their families have decent lives,” Sakanaka said in explaining the major difference between the new plan and current immigration policy. “We will take care of their lives, as opposed to the current policy, in which we demand only highly skilled foreigners or accept foreigners only for a few years to engage in simple labor.”
Japan had 2.08 million foreign residents in 2006, accounting for 1.6 percent of the population of 128 million. Raising the total to 10 million, or close to 10 percent of the population, may sound bold but is actually modest considering that most European countries, not to mention the U.S., have already exceeded this proportion, Sakanaka said.
Fukuda outlined in a policy speech in January his aim to raise the number of foreign students to 300,000 from the current 130,000, but without specifying a timetable.
However, the immigration plan calls for the goal to be achieved soon and for the government to aim for 1 million foreign students by 2025. It also proposes accepting an annual 1,000 asylum seekers and other people who need protection for humanitarian reasons.
Akio Nakayama, manager of the Tokyo office of the Geneva-based International Organization for Migration, said the important thing about the new plan pitched by the LDP members is that it would guarantee better human rights for immigrants.
“The plan emphasizes that we will accept immigrants, not foreign workers, and let them live in Japan permanently,” Nakayama said.
“The most remarkable point is that immigrants’ family members are included,” he said. “I have never seen this in similar proposals.”