The founder of Japan’s failed language school chain Nova went on trial on Monday charged with embezzlement over a scandal that left thousands of foreign teachers without jobs.

Nova, whose schools were once ubiquitous across Japanese cities, filed for bankruptcy protection in 2007 after the government ordered it to halt part of its operations over insufficient refunds for students.

Founder Nozomu Sahashi was then accused of siphoning off 320 million yen (S$4.8 million) from a benefits fund set up through employee contributions.

At his first court hearing, Sahashi, 57, admitted to using the funds but only said: ‘I cannot make a judgement on whether it should be considered embezzlement.’

His defence lawyer, according to a report by Jiji Press, said Sahashi had ‘no intention of embezzling money’ and had spent more than 1.1 billion yen of his private money to run the company.

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 even offered to give lessons for food after Nova’s collapse left them unemployed in one of the world’s most expensive countries.

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.

http://www.straitstimes.com/Breaking%2BNews/Asia/Story/STIStory_384477.html

The former president of English conversation school operator Nova Corp. admitted to embezzling employment benefit funds shortly before the company went bankrupt at his first court hearing Monday at the Osaka District Court.

But defense counsel for Nozomu Sahashi, 57, claimed his actions were in the interest of the employees and do not constitute the crime of professional embezzlement, pleading not guilty.

“It cannot be judged whether it is embezzlement or not,” Sahashi said.

According to the indictment, Sahashi diverted about 320 million yen from an employment benefit fund on July 20, 2007, transferring the money to the bank account of an affiliate company.

He is believed to have used it to reimburse tuition fees to those who canceled their contracts for language lessons.

“I apologize for causing students and employees great trouble,” Sahashi said at the beginning of the hearing.

Nova went bust in October 2007, leaving thousands of employees jobless and its students without refunds.

Nagoya-based G.communication Co. took over some of Nova’s operations in November that year.

Separate from the criminal case, former Nova students filed a lawsuit at the Osaka District Court seeking a total of 16 million yen in damages from Sahashi, the former management team and the audit corporation over their prepaid lesson fees.

Sahashi launched English conversation classes in Osaka in 1981 and set up Nova in 1990. His venture grew into Japan’s largest chain of English schools, with some 480,000 people taking its language lessons at its peak, before going bankrupt.

http://www.pddnet.com/news-ap-lead-ex-nova-president-admits-to-embezzling-but–053109/

[Former Nova President Nozomu] Sahashi is under indictment on charges of embezzlement in the conduct of business for transferring 320 million yen from the account of the employees’ mutual assistance association into another account in July 2007, exchanging the money for a check and placing the funds in an affiliate’s account.

A prosecutor said in the opening statement that Sahashi embezzled the funds because NOVA was pinched for money. “The defendant committed the crime after his firm became hard-pressed for cash and had difficulties repaying tuition fees to students who cancelled their contracts.”

The prosecutor said that on July 19, 2007, the day before the alleged crime, Sahashi instructed an accountant in the firm to use money from the association to refund tuition fees.

The accountant told him that the money in the association cannot be used that way. However, Sahashi said, “I know that, but we have no choice because we have no other funds,” according to the opening statement.

Moreover, apart from the 320 million yen, prosecutors accuse Sahashi of misappropriating approximately 30 million yen from the mutual assistance association between March 2004 and March 2007.

http://mdn.mainichi.jp/mdnnews/national/news/20090601p2a00m0na010000c.html