NationStates Jolt Archive

Nova, the largest English language school chain in Japan has imploded due to some really shady business practices (Shady even for Japan).

Foreign teachers jobless after Japan school goes bust

Sat Oct 27, 4:53 AM ET

Thousands of foreign teachers have been made jobless and face expulsion from Japan after the country's biggest chain of English language schools folded and sought protection from creditors.

Nova Corp said on Friday that it has filed for court protection from creditors amid efforts to turn its business around after being punished by authorities for misleading students.

Nova has some 7,000 employees, of whom about 4,000 are foreigners, Japanese media estimated. Many have not been paid for months as the company struggled to keep afloat.

The British and Australian embassies in Tokyo are offering advice to its nationals left jobless.

About 300,000 students, many of whom who have prepaid for lessons, are also affected by the school shutdown.

"It's a quite a large problem," said an official at Australia's Department of Foreign Affairs and Trade in Canberra. The Australian government estimates about 900 Australians are employed at Nova.

The Australian government has asked national carrier Qantas to offer reduced airfare for a limited period to Australian Nova employees wishing to go home.

The British Embassy also said on its web site on Saturday that it was "aware of recent concerns regarding payment of wages to Nova employees," and said they are "closely monitoring the situation."

It urged the employees to contact regional Nova offices and workers' union representing the company's workers.

Many teachers, unaware that the company had decided to file for court protection, turned up at work on Friday only to find the schools closed.

"Teachers are always the last ones to be told," the Japan Times newspaper quoted 32-year old Genevieve Latimer, an Australian, as saying. "I haven't even received my September paycheck."

Many teachers are also left worried about their visa status.

Nova, which operates over 900 schools in Japan, posted net losses for the past two business years and said it held a total 43.9 billion yen in debt as of July.

Nova said a rapid expansion has lowered its profitability and a government penalty to curb taking on new students has hit revenues.

In June, the trade ministry punished Nova for misleading prospective students about its services. The company was forbidden for six months from signing up students for contracts that were on year or longer, or more than 70 hours of lessons.

Two lawyers, appointed by the court to oversee Nova's assets and other affairs, told a news conference on Friday they would try to find a sponsor to help rebuild the company, but would dissolve the firm if they could not do so within a month.

Japanese internet firm Rakuten Inc has shown an interest in helping Nova, a Japanese daily Asahi Shimbun reported on Saturday.

The lawyers said they would contact Aeon Co Ltd, Japan's second-largest retail group, and other companies on the possibility of becoming a sponsor, the paper said.
http://news.yahoo.com/s/nm/20071027/wl_nm/japan_nova_dc;_ylt=Ar2e0bBrLY3Qc2V4w5wJq39vaA8F

I really feel sorry for my fellow gaijin teachers from Nova. For one thing, the times that language schools hire new teachers are March and August, not the tail end of October, and the capacity to absorb that many foreigners is sorely lacking as well. Furthermore, many Nova teachers are college graduates who do not have credentials for teaching, particularly teaching EFL, and, thanks to Nova policies, have little Japanese ability or contacts that might help them out. Add in visa sponsorship worries (No Nova, no visa, and Japan has gotten very strict on overstays regardless of the reason) and there are about 4,000 very worried people who are very far away from their homelands right now.

So what would you do in the above situation? And what do you think should be done?

Poll coming up in a sec...

I like a mix of options 1, 2, and 5...

The home embassies should help out the foreign tutors. As to the Japanese ones, I'm sure they could probably find jobs teaching in Japanese schools.

well that certainly sucks.

their home countries should make some kind of arrangements for them.

if japan considers them a valuable resource that will have to be replaced with difficulty when the language school problem is resolved (either through reorganization of nova or the starting of a new school by someone else) they should do something to keep as many in the country until march as they can.

if not, their own countries should do what they can to get them home as quickly and easily as possible.

This is why we have embassies and consulates. The various nations need to get together and work out a repatriation plan.

that sucks, I also thought this thread was going to be about astronomy or something.

The teachers should pack their bags, buy a ticket, and go home. If they don’t have money for a ticket, they should have family/friends buy them a ticket. If they don’t have family/friends, their embassies should give them a ticket and send them the bill.

(Shady even for Japan).


...

As a hairy savage, I am intrigued by that statement.

What are they doing when they are "misleading their students"

Click Stand;13170750']What are they doing when they are "misleading their students"
Probably ensuring them a year's tuition for a set fee, and when Nova collapsed, they couldn't honour that agreement.

The teachers should pack their bags, buy a ticket, and go home. If they don’t have money for a ticket, they should have family/friends buy them a ticket. If they don’t have family/friends, their embassies should give them a ticket and send them the bill.


Or better yet, send the bill to the people running NOVA since they still owe these teachers money.

I want each of those 4,000 to chip in what little money they have left and pay me to compensate me for the time ive wasted on being confronted with thier problems.

LG! Ready the Taco Chopper!

Click Stand;13170750']What are they doing when they are "misleading their students"
Nova had advertised that students could A. Buy blocks of class time with a full refund should the student decide to quit. In practice they would never refund the full amount, even after stating that they would, and did not honor the legal cooling off period that Japan has. B. Students were also told that they could get English classes when they wanted to, in reality however the classes were full, something Nova knew about when making that promise.

The ministry, after hearing complants, slapped Nova silly.

Well, Australia is really short on good teachers. I'm sure some will come home and find good jobs there.

I feel sorry for teachers, always a victim of someone else's mistakes.

...my mind kept shouting "FEMA! FEMA! FEMA!" as I read that...

The teachers should go the seppuku route or else wander the land as Ronin.

Nova, the largest English language school chain in Japan has imploded due to some really shady business practices (Shady even for Japan).


http://news.yahoo.com/s/nm/20071027/wl_nm/japan_nova_dc;_ylt=Ar2e0bBrLY3Qc2V4w5wJq39vaA8F

I really feel sorry for my fellow gaijin teachers from Nova. For one thing, the times that language schools hire new teachers are March and August, not the tail end of October, and the capacity to absorb that many foreigners is sorely lacking as well. Furthermore, many Nova teachers are college graduates who do not have credentials for teaching, particularly teaching EFL, and, thanks to Nova policies, have little Japanese ability or contacts that might help them out. Add in visa sponsorship worries (No Nova, no visa, and Japan has gotten very strict on overstays regardless of the reason) and there are about 4,000 very worried people who are very far away from their homelands right now.

So what would you do in the above situation? And what do you think should be done?

Poll coming up in a sec...

There wasn't an "other" option...

As someone intimately familiar with this problem - I'm a member of the union that represents the few Nova teachers who are union, as well as a former employee ('95-'01) - what I'd really like to see is Mr. Sa(ru)hashi (the founder and president, who was deposed by the board last Thursday in the same meeting they voted to file for bankruptcy protection) tossed in jail on several counts of fraud (both students and employees), illicit stock market manipulations, widespread labor law violations, and outright theft; and his personal assets garnered through his illegal seized and distributed to his victems.

A few things not mentioned in that article:
This is not a sudden and surprising event. It's been in the works for a few years, and the writing's been on the wall since July, when employee's wages were first delayed.

Many employees were housed in apartments arranged by Nova. The rents charged by the company were usually quite a bit higher than the actual rent on the apartment - the common situation was for 3 people to share an apartment. Each had the full rent of the apartment deducted from their salary instead of a one-third share. The company did so fraudulantly.

For at least two months, rents have been deducted from salaries, and yet gone unpaid to the landlords. This has resulted in employees being evicted.

Due to certain improper accounting methods, the companies liabilities are most likely double what they reported on Friday. Furthermore, the company had been running in the red for at least two years, and was most likely insolvent as far back as June.

The president is suspected to have engaged in illicit stock dealings.

Stock speculators involved

OSAKA--A group of stock speculators charged by the Osaka District Public Prosecutors Office on suspicion of violating the Securities and Exchange Law, had been involved in a Nova capital expansion plan, the Yomiuri has learned.

The plan had been promoted by former Nova President Nozomu Sahashi, who was dismissed Thursday. Sahashi's financial problems may have led him to contact the group, as such groups control stock prices to gain illegal profits. Nova's court-appointed administrators stated that the move was grounds for Sahashi's dismissal.

According to sources, Sahashi had contacted the group led by Haruo Nishida, 57, an investment adviser who was arrested by the prosecutors on Oct. 12 on suspicion of manipulating the price of a construction company stock.

Nova announced on Oct. 9 it would issue stock warrants facilitating the purchase of 200 million new stocks, nearly three times the stock that had been issued, to two investment funds, with a view to securing about 6.4 billion yen. The funds are located in the Virgin Islands.

Nishida is said to have known people related to the investment funds and invited investors to Nova's plan before it was announced.
(Oct. 28, 2007)
http://www.yomiuri.co.jp/dy/national/20071028TDY02309.htm

Shady stock speculator claims link to NOVA's failed rescue plan
Haruo Nishida (Mainichi file)
Haruo Nishida (Mainichi file)

A stock speculator arrested for alleged market manipulation has claimed to have had links with two tax haven-based funds ousted NOVA Corp. President Nozomu Sahashi had been trying to get to prop up the failed English conversation school chain, the Mainichi has learned.

Haruo Nishida, 57, the speculator arrested by the Osaka District Public Prosecutors Office earlier this month for stock manipulation, claims to have been involved in the setting up of the two funds based in the British Virgin Islands.

Sahashi, however, vehemently denied the claims.

"I've never heard of Nishida, nor have I met him," Sahashi told the Mainichi before he was axed by his board last Thursday. "A lawyer was dealing with the funds and I've heard the lawyer has had nothing to do with him, either."

Receivers for the failed chain have pledged to conduct a thorough probe into the deal Sahashi was trying to set up with the funds, giving them a share warrant that he hoped would generate about 6.4 billion yen in capital.

"Sahashi ran around arranging the share warrant on his own," one of the company's receivers said. "If there were any dirty or unfair activities that went on, we will have to take legal steps."

On Oct. 24, NOVA issued 70 million yen worth of share warrant stock that would allow the two funds to purchase up to 200 million shares in the company. If the funds purchased all the shares, it would generate about 6.4 billion yen in cash. The plan failed, however, when NOVA filed for protection from creditors on Friday and Jasdaq announced it would delist the company on Nov. 27.

Speculator Nishida was arrested on Oct. 12 after he allegedly fiddled with the price of shares in A.C. Holdings Co. when it was known by its old name of Nanno Construction Co. On the day before his arrest, Nishida told the Mainichi he was involved in the funds dealing with Sahashi.

"I helped set them up," he said. "I was just about to do it (get involved with NOVA shares) and was heading off to Britain (in connection with that), but the Osaka district prosecutors stopped me, so I couldn't go."
http://mdn.mainichi.jp/national/news/20071029p2a00m0na024000c.html

Nova Corp.'s Sacked Chief In Hot Water
Vivian Wai-yin Kwok, 10.30.07, 9:59 AM ET

While 300,000 students are worrying about their prepaid tuition and 4,900 foreign teachers are waiting for unpaid wages, lawyers appointed to act as receivers for the bankrupt Nova Corp. recently discovered that Nozomu Sahashi, the former president, had secretly sold a 50%-plus stake in the ailing English-language school chain.
http://www.forbes.com/markets/2007/10/30/nova-language-centers-markets-equity-cx_vk_1030markets03.html

Also, Sa(ru)hashi is known to have connections to the LDP. These ties helped put off government investigations of Nova's illicit business practices until the Supreme Court forced the issue.

Finally, Sa(ru)hashi has been in hiding since June. It is widely suspected he's fled the country with the proverbial bags 'o monrey.

their home countries should make some kind of arrangements for them.

In the case of Australia and the UK, they are.

if japan considers them a valuable resource that will have to be replaced with difficulty when the language school problem is resolved (either through reorganization of nova or the starting of a new school by someone else) they should do something to keep as many in the country until march as they can.

if not, their own countries should do what they can to get them home as quickly and easily as possible.

Knowing the industry (having been in it for 15+ years), I'd say there's a 33% chance that Nova will find a receiver in the month they have, and a 66% chance they'll be bankrupt in a month.

Either way, the teachers should be getting 80% of unpaid wages due them.

Click Stand']What are they doing when they are "misleading their students"
Nova had advertised that students could A. Buy blocks of class time with a full refund should the student decide to quit. In practice they would never refund the full amount, even after stating that they would, and did not honor the legal cooling off period that Japan has. B. Students were also told that they could get English classes when they wanted to, in reality however the classes were full, something Nova knew about when making that promise.

The ministry, after hearing complants, slapped Nova silly.

Just to note, those were the main legal complaints. There are other legit possible grounds for misleading both students and employees, such as highly jacked up prices for learning materials, questionable promises regarding students progress, the aforementioned rent scams, a health insurance scam foe the teachers, etc.

Or better yet, send the bill to the people running NOVA since they still owe these teachers money.

That's what will eventually happen, more or less, when the bankruptcy is official.

If anyone has any questions about this situation, I'm quite intimately familiar with the details, so please ask! :)

"Nova fall down and go boom". Oh really. That's what novae usually do.
http://en.wikipedia.org/wiki/Nova

*LG-style nod*

"Nova fall down and go boom". Oh really. That's what novae usually do.
http://en.wikipedia.org/wiki/Nova

*LG-style nod*

LOL! Mr. Monkeybridge should have realised that before nameing his starcrossed company after such an occurance. :D

If the teachers can expect to get 80% of whats owed them, I suppose that better than noting, but what about the students?
Can they at least sue for the money that they spent on tuition they didnt recieve, and why arent these people being prosecuted for fraud, and general douchebaggery?

If anyone has any questions about this situation, I'm quite intimately familiar with the details, so please ask! :)
Thanks. I thought you'd probably know better than me (I never worked for Nova, thankfully), but you seemed to have disappeared so... ;)

Oh, man...

I was a NOVA teacher in Sendai a few years ago. I liked the students and a lot of the other teachers, but the management was fairly shitty, IMHO.

Ah, well...the pink bunny choked to death on its own bullshit, and now teachers and students have to eat it...

I think its cool the way Australia and the UK are at least trying to hook up their people with a way home.

I had a few friends who wanted to be lifers in Japan, hope they're okay.

Well, like they used to say in Japan, "If you eat poison, lick the bowl".

If the teachers can expect to get 80% of whats owed them, I suppose that better than noting, but what about the students?
Can they at least sue for the money that they spent on tuition they didnt recieve, and why arent these people being prosecuted for fraud, and general douchebaggery?
IIRC, under Japanese law, once the bankruptcy is settled out and all outstanding debts paid (Unpaid wages being a part of them), people with a hold against the company (i.e. students) can make a claim and get part of their money back. The chances of them seeing any significant refund though is pretty low.

As to why those people haven't been charged, well, as Daistallia noted, the (former) president has vanished from the face of Japan and he's the one people are after.

IIRC, under Japanese law, once the bankruptcy is settled out and all outstanding debts paid (Unpaid wages being a part of them), people with a hold against the company (i.e. students) can make a claim and get part of their money back. The chances of them seeing any significant refund though is pretty low.

As to why those people haven't been charged, well, as Daistallia noted, the (former) president has vanished from the face of Japan and he's the one people are after.

Maybe he'll show up in North Korea, I dunno.

IIRC, under Japanese law, once the bankruptcy is settled out and all outstanding debts paid (Unpaid wages being a part of them), people with a hold against the company (i.e. students) can make a claim and get part of their money back. The chances of them seeing any significant refund though is pretty low.

As to why those people haven't been charged, well, as Daistallia noted, the (former) president has vanished from the face of Japan and he's the one people are after.


See, this is why I cant run for office. If I were in charge, this guy would be found wherever he went, and dragged back kicking and screaming, probably with multiple contusions, and be tried for every crime I could think of.

So, the teachers lose 20% of thier hard earned money, and the students get bent directly over, and this asswipe gets away, probably with a small fortune.
Anytime the little guy gets shit on, it makes me a sad panda.

Maybe he'll show up in North Korea, I dunno.
*heh* That'd be funny. He could teach Kim Jong Il English then with the pink bunny getting a new line of work as the new spokesman for the DPRK.

*heh* That'd be funny. He could teach Kim Jong Il English then with the pink bunny getting a new line of work as the new spokesman for the DPRK.

Hello, Comrades! I'm the Pink Bunny of Our Great Socialist Society! In fact, I'm so Pink, I'm Red! Let's all trim our hair in accordance with socialist lifestyle!

Also, I've brought books! With pictures! From the seventies!

If the teachers can expect to get 80% of whats owed them, I suppose that better than noting, but what about the students?
Can they at least sue for the money that they spent on tuition they didnt recieve, and why arent these people being prosecuted for fraud, and general douchebaggery?

They have sued. And if Sa(ru)hashi* is caught, he might have to pay through the nose (this is Japan afterall - corruption still reigns...)

* Sahashi was nee Saruhashi, which translates as "Monkeybridge".

Thanks. I thought you'd probably know better than me (I never worked for Nova, thankfully), but you seemed to have disappeared so... ;)

:D Yeah, I've been busy of late - not all of it union business... ;)

Oh, man...

I was a NOVA teacher in Sendai a few years ago. I liked the students and a lot of the other teachers, but the management was fairly shitty, IMHO.

Ah, well...the pink bunny choked to death on its own bullshit, and now teachers and students have to eat it...

Heh. There're very few ex-Nova T's who have anything good to say about the company...

IIRC, under Japanese law, once the bankruptcy is settled out and all outstanding debts paid (Unpaid wages being a part of them), people with a hold against the company (i.e. students) can make a claim and get part of their money back. The chances of them seeing any significant refund though is pretty low.

As to why those people haven't been charged, well, as Daistallia noted, the (former) president has vanished from the face of Japan and he's the one people are after.

Yep. Seeing as the company's debts, it's unlikely the students will get much back.

See, this is why I cant run for office. If I were in charge, this guy would be found wherever he went, and dragged back kicking and screaming, probably with multiple contusions, and be tried for every crime I could think of.

So, the teachers lose 20% of thier hard earned money, and the students get bent directly over, and this asswipe gets away, probably with a small fortune.
Anytime the little guy gets shit on, it makes me a sad panda.

The good news is that his name is mud and he'll never be able to operate in Japan again. The bad news is that he's prolly long gone, according to one reliable source, he's most likely hiding in France.

Hello, Comrades! I'm the Pink Bunny of Our Great Socialist Society! In fact, I'm so Pink, I'm Red! Let's all trim our hair in accordance with socialist lifestyle!

Also, I've brought books! With pictures! From the seventies!

Heheheheh... More inside humor... Hopefully you managed to avoid the "Diplomat" BS...

And yet another scam brought to us by tthe monkey man:

Ex-NOVA boss Sahashi suspected of profiting unfairly from video phone equipment

OSAKA -- Former NOVA President Nozomu Sahashi has come under suspicion of unfairly profiting from the sale of overpriced video-phone equipment, a lawyer for the collapsed English-teaching company has announced.

Toshiaki Higashibatake, a lawyer serving as a preservation administrator for NOVA, made the announcement at a news conference in Osaka. The lawyer said a company that was in essence fully owned by Sahashi's family was suspected of buying video phones from a manufacturer and selling them to NOVA for several times the original price, thereby allowing Sahashi to profit unfairly.

"We are investigating whether this constitutes aggravated breach of trust or misappropriation," Higashibatake said, indicating that both civil and criminal legal proceedings were being considered.

The lawyer said the video phones were provided by communications firm Ginganet Co., which holds the patents to the video-phone system used in NOVA's "Ochanoma Ryugaku" home lessons. NOVA reportedly invested 7 billion yen in the development of the service. Higashibatake said that over five years from July 2002, NOVA bought 100,000 units from Ginganet, paying out 8.2 billion yen.

Higashibatake said that immediately after NOVA collapsed and a protective court order was issued, Sahashi sold all of the shares he held in Ginganet and the travel firm NTB Co., including those held by his relatives, to a single person.

"I was hoping that he would take responsibility for his management of the company and entrust all of the shares to a preservation administrator, but what has happened is really regrettable. I'm furious about it," the lawyer said.

http://mdn.mainichi.jp/national/news/20071031p2a00m0na025000c.html