Panel rules against decision not to indict Nova ex-president

An independent panel formed by court-entrusted citizens has ruled unjust last year’s decision by prosecutors not to slap criminal charges on the failed English conversation school operator Nova Corp. and its former president for failing to pay salaries to foreign instructors and employees, the panel said Tuesday.

The decision was made by Osaka’s No. 2 committee for the inquest of prosecution, which urged the Osaka District Public Prosecutors Office to reopen investigations into Nova and former Nova President Nozomu Sahashi, 57.

The panel found that Nova and Sahashi were aware of a revenue shortfall, ran the language school chain on a hand-to-mouth basis, and continued to hire instructors and employees without any clear prospect of ensuring the source of their salaries.

The Ministry of Health, Labor and Welfare filed with the prosecutors in June 2008 an investigative report on Nova and Sahashi on suspicion of violating the labor standards law for failing to pay about 105 million yen in salaries to some 400 language instructors and employees in September and October 2007.

But in July 2008, the prosecutors decided against indicting Nova and Sahashi, saying they did not intentionally fail to pay the salaries.

Sahashi is currently on trial at the Osaka District Court on charges of professional embezzlement for allegedly diverting about 320 million yen from an employment benefit fund to reimburse tuition fees to people who canceled contracts for language courses.

An 11-member committee for the inquest of prosecution is established at all district courts across Japan to check decisions by prosecutors, who have a monopoly on the authority to indict.

Its main mission is to review prosecutors’ decisions not to indict, usually acting upon a complaint from crime victims or their relatives.

The panel’s decision is nonbinding, but prosecutors will usually launch re-investigations if the committee rules against their decision not to prosecute.

Nova went under in October 2007 and Nagoya-based G.communication Co. took over some of Nova’s operations in November that year.

Sahashi started running English conversation classes in Osaka in 1981 and set up Nova in 1990. His venture grew into the nation’s largest chain of English conversation schools before going bankrupt.