Liberal Japan

Nova issue … just updating this entry to include two articles about possible tie up with HIS travel company.


New articles:

• 2007/07/03 Travel agency H.I.S. eyes alliance with struggling Nova, The Asahi Shimbun; “Major travel agency H.I.S. Co. may form an alliance with Nova Corp., the English conversation school operator struggling under a government order to partially suspend operations, sources said.”
• 2007/07/02 H.I.S. mulls assisting scandal-hit Nova’s turnaround efforts, Kyodo News via Yahoo! News; “Major travel agency H.I.S. Co. is considering extending assistance to Nova Corp., a scandal-tainted operator of foreign language schools, in the form of a business tie-up or financial assistance, sources close to the matter said Monday.
  H.I.S. Chairman Hideo Sawada met with Nova President Nozomu Sahashi in late June in Tokyo to ask about Nova’s financial conditions as he pondered a possible move to salvage Nova, according to the sources. Assistance from H.I.S. could prove to be a godsend for Nova, which is in desperate need of raising funds in order to shore up its sagging operations after the government ordered it to suspend part of its operations as a penalty for fraudulent business practices, the sources said.”

Articles of special merit on this topic:

• 2007/06/14 What NOVA Got Nailed For Let’s Japan.org; “METI has issued a 22-page press release [in Japanese] detailing how NOVA violated the Specific Commercial Transaction Law, what punishments and improvements were ordered, and anecdotal evidence of NOVA’s shady practices. Let’s take a look at the specific violations of the law.” Excellent article, specifying very specifically the governments complaints against NOVA.
• 2007/06/13 METI to order Nova to suspend part of its business: The beginning of the end, Trans-Pacific Radio; “Yes, that headline is true. No, they’re not yet telling us the full story behind which part of the business NOVA will have to suspend (For further details that have come to light since this was written, please see below -Ed.). Here’s what we do know: After having threatened to do so earlier this week, the Ministry of Economy, Trade and Industry is set to order NOVA to shut down part of its business for six months in retaliation for lying to their students when making sales pitches and violating industry laws.” I think this was the first article in the blogosphere to break the news.
• 2007/06/13 NOVA English Teaching Corporation Faces Suspension!, Japan Probe; Well-updated entry.

Other previous articles:

• 2007/07/02 Ministry tolerated Nova methods, The Yomiuri Shimbun; “The Economy, Trade and Industry Ministry issued a document in June 2002 that tolerated English conversation school industry leader Nova Corp.’s controversial practice of minimizing refunds of students who terminated their contracts, according to sources close to the issue. Four months before the document was issued, the Tokyo metropolitan government began its own administrative procedures against Nova, criticizing the Osaka-based chain’s refund method as being detrimental to departing students. But because the ministry’s document said the refund method was not wholly illegal, the metropolitan government discontinued its administrative procedure. Nova had continued its refund calculation method until March, when the Supreme Court ruled it illegal.”
• 2007/07/01 Why METI endorsed the NOVA’s illegal business?, comparative consumer law; This entry cites some of the specific laws that NOVA was breaking.
• 2007/06/29 Shareholders meetings reach peak / Nova, Katokichi, Kajima among scandal-hit firms grilled by investors, The Yomiuri Shimbun; “Among such companies is Nova Corp., the nation’s largest English-language school chain, based in Osaka, that was recently ordered by the Economy, Trade and Industry Ministry to suspend some of its operations after false explanations of its services caused contract trouble with its customers. The company held a general meeting in Naniwa Ward, Osaka, which was attended by 46 shareholders. During the meeting, Nova President Nozomu Sahashi told the shareholders, ‘We’d like to regain your trust as soon as possible.’ However, a 57-year-old shareholder of Tondabayashi, Osaka, has apparently lost faith in the current Nova management. ‘It’s obvious that the management is responsible for causing this scandal. Now that [the scandal] has negatively affected the share price, they have to resign,’ he said.”
• 2008/06/28 Nova Pres. Sahashi refuses to resign over exaggerated ad scandal, Kyodo News via Yahoo! News; “Nova Corp. President Nozomu Sahashi on Thursday refused to resign from the top post at the largest English-language school operator in Japan over a scandal involving exaggerated advertisements. His refusal came in response to a call for his resignation from Nova shareholders who asked him at their annual meeting to resign to take responsibility for the scandal, which has led to a government order partially suspending Nova’s business operations. ‘If I resign, the company will collapse,’ Sahashi told the meeting in Osaka. Sahashi apologized for causing the disciplinary action by the government and said Nova has created a management reform committee to investigate the scandal and consider how best to avoid scandals in the future. The committee, consisting of four experts on corporate compliance, will compile an interim report by the end of July and a final one by the end of August, he said. The committee is expected to look into Sahashi’s responsibility and other issues related to the scandal.”
• 2007/06/28 Study the school before studying English, The Japan Times; In the article one professor compares eikaiwa to mizushobai …
• 2007/06/28 Tokyo to Nova: Not Good Enough, Let’s Japan; “According to the Asahi Shimbun, Nova has submitted a plan on how it would clean up its act only to be smacked down as being too vague by the metropolitan government of Tokyo.”
• 2007/06/24 NOVA yougo-shuchou no Nakayama Yasuhide gi-in, Suponsaa-bangumi ni shutsuen, The Asahi Shimbun; This article is only in Japanese as far as I know. As I read it it says, Yasuhide Nakayama used to appear regularly on a local program as a commentator, and for a period of time Nova was the sponsor for this program. There are more details in the article. This is interesting because Nakayama has been a big defender of Nova. Check this article out soon, because I don’t know how long the Asahi archives its Japanese articles.
• 2007/06/23 Japan: Reactions to the Nova Suspension, Global Voices; This is a great piece by Hanako Tokita. She gives a round up of reactions in Japanese along with an English translation. Well worth checking out!
• 2007/06/23 Nova’s Political Connection, Let’s Japan.org; “When the Nova story broke, much of the attention was focused on the punishment which prompted lots of speculation as to whether Nova would be around in six months. What has not been widely covered is Nova’s political connection in all this.” Excellent piece, check it out.
• 2006/06/22 Nova’s exact bid raises eyebrows, The Yomiuri Shimbun; “Nova Corp. in Osaka, the nation’s largest English school chain, won a public tender for an Osaka Municipal Board of Education program to dispatch assistant language teachers to municipal middle schools in spring 2006 with a price matching the closed ceiling price of 54,850,200 yen … A board official said the matching prices were purely coincidental. The board, however, plans to investigate whether information about the tender had been leaked, since the bids matched within a margin of only 100 yen. … The firm also won other public tenders for a similar program for primary schools with bids of 95 to 98 percent of the ceiling prices.” The article explains the details. There’s no smoking gun evidence, and, of course, Nova and the relevant bureaucrats are denying anything foul is afoot.
• 2007/06/20 Nova on YouTube, Let’s Japan.org; “Clips of the Nova story have started showing up on YouTube.” Great clips, Check it out!
• 2007/06/20 Troubled Nova staff slams work conditions, The Japan Times; “Nova Corp. teachers and other employees in Tokyo criticized the company Tuesday, saying the troubled chain of foreign-language schools must improve its business not just so it becomes more honest with customers but also for the sake of its workers. … Nova union members also demanded that the firm provide better working conditions for the Osaka-based chain’s roughly 5,000 teachers at its branches nationwide. …The union has been fighting Nova for three years to secure a stable work environment in which its teachers can have indefinite or long-term employment agreements instead of annual renewals, and to allow teachers to qualify for social security insurance. …As the largest language school chain in Japan, Nova’s practices effectively set the industry standard, the union said, adding that improved conditions would benefit the entire sector.”
• 2007/06/17 Nova is not dead, but buried alive, Trans-Pacific Radio; No more subsidies for students.
• 2007/06/17 Nova president eyes issuing new shares, The Japan Times; “Nova Corp. is considering issuing new shares to strengthen its capital and dispel market concerns that its business could worsen in the wake of the government’s order to suspend part of its operations, President Nozomu Sahashi said.”
• 2007/06/16 The HMS NOVA Sinks Some More Let’s Japan.org; “Nova is quickly becoming the debacle that keeps on festering. The Asahi Shimbun is reporting a leak from a Nova meeting in which Sahashi was told that they didn’t have enough instructors. Sahashi’s reply: ‘If sales are low, we can’t increase the number of instructors no matter how many students there are.’”
• 2007/06/16 Nova Looking for Capital Support Let’s Japan.org; “Things just keep looking bleaker and bleaker for Nova. According to the Yomiuri Shimbun [in Japanese], as of June 20, Nova’s classes will no longer be eligible to accept money from the government retraining program for the next five years. Since 1999, Nova has received 16 billion yen from the government in assistance that covered 71,000 students. Given Nova’s scandalous behavior, it would be more appropriate to say Nova bilked the government out of 16 billion yen.
  Another story from the Yomiuri reports on how Nova president Sahashi is considering selling off properties or forming a partnership with another company to help shore up its capital.”
• 2007/06/16 EDITORIAL: Nova suspension order, “This is the first time that an English conversation school has been so harshly disciplined. However, it is a natural reflection of the shoddy way in which Nova has run its business–namely, engaging in a systematic deceit with the signing and canceling of course contracts. A detailed check of the management reveals 18 different rule violations. They include exaggerated ad copy, explanations contrary to the facts, refusing or delaying refund payments from canceled contracts and failure to disclose key matters, among other things.”
• 2007/06/16 Exploiting the zeal of Japanese to learn English, The Asahi Shimbun; Interesting background article.
• 2007/06/15 Students, ex-staff critical of Nova, The Yomiuri Shimbun; “Students and former employees of the Nova Corp. language school chain were critical of the company’s practices in light of its suspension Wednesday for six months from recruiting students on long-term contracts.”
• 2007/06/15 Operational irregularities common practice, The Yomiuri Shimbun; “The Economy, Trade and Industry Ministry concluded irregularities in Nova Corp.’s operations, such as giving false accounts of contracts or producing exaggerated advertisements, were practiced in all of its branches, it has been learned.”
• 2007/06/14 Nova barred from making long contracts, The Yomiuri Shimbun; “The Economy, Trade and Industry Ministry said Wednesday it ordered Nova Corp., the nation’s largest English language school chain, to suspend for six months its recruitment of customers for new contracts of more than one year or 70 lesson hours, starting Thursday.”
• 2007/06/14 Rule-breaking Nova hit with suspension order, The Asahi Shimbun; “The industry ministry Wednesday ordered Nova Corp., the nation’s largest English language school operator, to suspend part of its operations for six months as punishment for deceiving potential students and committing other violations.”
• 2007/06/14 METI orders Nova to suspend part of business for lying to consumers, Kyodo via Japan Today; “The industry ministry said Wednesday it has ordered Nova Corp, Japan’s largest English-language school operator, to suspend part of its business for six months starting Thursday for lying to consumers about its services when soliciting students.”
• 2007/06/14 Nova dealt penalty for deception, The Japan Times; “Nova Corp., the nation’s largest English-language school chain, was ordered by the government Wednesday to partially suspend business for six months for lying to customers about its services.”
• 2007/06/13 METI puts the Hurt on NOVA Let’s Japan.org; “According to the Asahi Shimbun, NOVA has been ordered by the Ministry of Trade, Economy and Industry to partially suspend operations for six months during which NOVA will not be able solicit, accept, or conclude any new contracts exceeding one year. METI found NOVA’s behavior to be in violation of the Specific Commercial Transaction Law.”
• 2007/06/12 NOVA’s Woes Continue; “NOVA is back in the news again with articles in the Yomiuri and Asahi shimbun detailing how NOVA just can’t make its problems go away. These are quick-and-dirty translations, so if I’ve gone horribly wrong somewhere, let me know.”
• 2007/05/26 NOVA Sees Red Again Let’s Japan.org; “As mentioned in the forums, NOVA has posted a loss of 2.5 billion yen.
  A summary of their earnings can be found in this Nikkei BP Net article …”
• 2007/04/04 Nova’s policy on cancellations illegal: top court, The Japan Times; “The Supreme Court ruled Tuesday that Nova Corp.’s contract cancellation policy is illegal and ordered it to repay about 310,000 yen to a man who canceled his contract for English lessons in 2004 but was offered a much smaller refund than he expected.”
• 2007/02/17 Nova probed over refunds, deception, The Japan Times; “Government authorities have rapped the knuckles of private English school chain Nova Corp. for allegedly shortchanging students on refunds and providing false accounts of its cancellation policy.”
• 2007/04/04 Top court: Nova’s refund tactic illegal, The Asahi Shimbun; “The Supreme Court on Tuesday rejected an appeal filed by Nova Corp., saying the refund system of the nation’s largest English conversation school is invalid and violates the specified commercial transaction law.”