In the wake of Nova Corp.’s filing for court protection Friday, employees said that although they were anxious over their livelihoods, they were relieved to no longer have to cope with a barrage of complaints from students and teachers.
Nova, the nation’s largest English-language school chain, applied for protection under the Corporate Rehabilitation Law with the Osaka District Court with debt of about 50 billion yen and suspended operations of all its schools.
Employees, mainly in their 20s, remained at their workplaces until the last moment, while many teachers had already stopped reporting to work over delays in salary payments. Lesson fees were also refunded to students who canceled their contracts with Nova. An employee in her 20s, who was manager of a branch in an office district in the Tokyo metropolitan area, said she began working for Nova after graduating from university as she wished to help people who wanted to learn English.
But she soon became dissatisfied with her position when she was instructed by the headquarters to try to get prospective students to sign lesson contracts.
As the number of branches increased around 2004 to 2005, more emphasis was placed on getting prospective students to sign contracts. In one case, one of the woman’s colleagues was reprimanded for opposing a superior over the policy.
In June, when Nova was punished by the Economy, Trade and Industry Ministry over lesson contracts and cancellation problems, she believed that Nova would recover.
She heard that the police had to be called to another branch because a student had become angry to the point of violence, apparently over a lesson contract dispute, but the headquarters offered no assistance in the matter. “I still told myself that I should hang on as long as I was getting paid,” she said.
Foreign teachers started not showing up for lessons in mid-September when their salary payments were delayed. Consequently, dozens of complaints poured in, creating chaos for the company’s inexperienced receptionists. One staff member complained of not being able to afford food, while another had been reduced to tears every day before she finally collapsed and stopped coming to the office.
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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.
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