Let's Japan.org Debunking Eikaiwa and Ramblings in Japan

Ahead of GEOS's Wednesday scheduled announcement of the measures they will take in response to the closure of its schools in Australia, will Tsuneo Kusunoki address the giant sucking sound that everybody is hearing?

Adelaide Now:

Meanwhile, a former director of GEOS Adelaide said the company acted as cash cow for the Japanese parent company.

Gary Maserow, who resigned in October, said he had "no idea" why GEOS Adelaide and eight other Australian GEOS companies went into voluntary administration.

Six of the nine companies recorded profits in the last financial year, according to financial reports completed by BDO Kendalls.

Mr Maserow, who was also regional co-ordinator for all GEOS colleges in Australia and New Zealand, said there was "enormous pressure" placed on the company to send Australian profits to Japan.

"Japan demanded and demanded," Mr Maserow said.

Dharmadasa Ratnayake Mudiyanselage, a director of the nine Australian companies, said the companies had liquidity problems.

Mr Maserow said he had "no idea" why all of the companies went into voluntary administration.

"What happened in the last six months?" Mr Maserow said. "Because the audit was fine."

Mr Maserow dismissed suggestions the global financial crisis had contributed to the collapse.

The Australian GEOS companies had two other directors at the time of the collapse: David Emert and Japan-based Tsuneo Kusunoki, who founded GEOS in 1973.

Mr Emert and Mr Kusunoki did not respond to calls.

Administrators Ernst & Young are continuing to investigate the collapse.

Let's recap that passage:

• GEOS Japan demanded and demanded.
• Six of nine GEOS Australia companies had record profits last year, although one director says they had liquidity problems.
• The former director of GEOS Adelaide doesn't know where the money went.
• The former director of GEOS Adelaide doesn't even know why the schools went into voluntary administration because the "audit was fine."

Healthy companies don't keel over and die over night. It would take an act of supreme stupidity on GEOS's part to siphon so much money out of its Australian schools that it would kill a popular and profitable part of its business. This suggests that there are more seriously underlying problems at GEOS. Is GEOS seriously hard up for cash? Or has Kusunoki seen the writing on the wall and chosen to line his pockets?

The stories out of Australia don't seem to match Kusunoki's assertions that the closures are a made-in-Australia problem and that everything's just fine in Japan. When the director of a school doesn't even know what happened and the people who presumably do aren't returning calls, something is wrong. Where did the money go? Moreover, if GEOS is so demanding, which overseas schools are next? Asia? North America? Europe?

Tomorrow, Mr. Kusunoki has to make some effort at helping the students he robbed of their language studies, but also needs to address the issue of the money if he intends to restore any trust in the GEOS brand.

GEOS has posted a brief note on its website [PDF] saying that it will explain what it will do in response to the school closures on Wednesday the 10th, following meetings in Australia:

この度はオーストラリア法人の各学校の閉鎖に関しまして、お騒がせ しましたことを改めてお詫び致します。

今回の件が現地法人で起こった事であり、弊社が商標権を許諾してい たとはいえ、GEOSブランドを信用してご入学頂き、今回の出来事にあ われました皆様に対して、現地での全ての説明会が終了した後、 2月10日(水)、弊社ホームページにて対応を発表致します。

From this short note, it appears that GEOS is backing away from the they-only-licensed-the-GEOS-brand excuse and realizes that the closures have damaged the GEOS brand. Maybe Kusunoki has been following Toyota's poor handling of its recall and understands that the appearance of inactivity is about the worst thing you can do in a crisis. It sounds like he or a representative went to Australia to find out what's been going on or apologize. That said, there will be no press conference on Wednesday; GEOS will make their announcement in the form of another PDF on its website. Any takers on what GEOS plans to do?

The most talked about, despised and loved Sumo Wrestler of our era has opted for retirement. The Mongolian Powerhouse that has dominated Japan's National Sport since being promoted to the rank of Yokozuna in 2003 has given in to pressure to bow out of the sport as his latest controversy surfaces.

It is being widely reported that Asashoryu severely beat a fellow bar patron in a drunken rampage in the Nishi-Azabu district of Tokyo in January. This is only the latest scandal in a career that many Sumo spectators and reporters believe is a black eye on the sport itself. Asashoryu has received negative publicity for alleged match-fixing. He also cited injury and declined to participate in summer Sumo events in 2007 and returned to Mongolia. During his trip home, he was filmed playing in a charity soccer match. When the Yokozuna returned to Japan he was suspended from upcoming tournaments. This marking the first time an active Yokozuna had been suspended from a major tournament. He has also drawn negative publicity for fighting with Sumo off the dohyo, complaining about officiating, injuring wrestlers in training sessions and refusing to adopt Japanese Citizenship.

By focusing exclusively on Asashoryu's transgressions and by holding him out as a hot-head or a bully, the Sumo world is exposing itself to be filled with unrealistic expectations of a professional athlete in the modern age. Sure, his latest drunken escapades are not to be condoned entirely, nor are other allegations made against him. However, this routine chastising of a champion that has achieved so much is at times painful. Sumo is a little different from other sports, because it is steeped in tradition and codes of conduct and the allure of the sport rests partly in those attributes.

The simple fact that Asashoryu is Mongolian has hampered his reputation with fans who have openly called for him to, “Go back to Mongolia.” The Yokozuna is being treated differently because he is not Japanese, and he is not totally willing to bend his spirit to what the Sumo Association expects. His behavior might have been unbecoming to a man entrusted with the Yokozuna rank, but he is uniquely an individual and has brought the popularity of the sport to new audiences and as a whole leaves the business of Sumo better off for his presence in the role of champion.

"It's not only Asashoryu's problem. The root of the problem is the association's economic motive," said journalist Yorimasa Takeda, who accused Asashoryu of match-fixing in an article published in a weekly magazine in 2007. Despite his "bad guy" image, Asashoryu was a fan magnet and thus generated a lot of money for the sumo industry, which was behind the association's reluctance to punish him severely, Takeda said. (1)

Asashoryu's Accomplishments:
First Mongolian Yokozuna
In 2005 he became the first wrestler to win all six official tournaments in a single calender year
He won a total of 25 top division tournament championships
Third highest all time on wins behind Taiho and Chiyonofuji
Career record 669- 173- 76

As Asashoryu retires he should be remembered for; his strong personality, his warrior spirit, his good nature, his dominance of native Japanese wrestlers and his outstanding record.

(1) http://search.japantimes.co.jp/cgi-bin/nn20100206a1.html

Japan Today has started a regular series on the state of the language school industry, in particular eikaiwa, written by Dean Rogers, president and CEO of Dean Morgan Co Ltd, the school that sounds like an investment company.

The first installment is an introduction laying out the ground to be covered, so there's not much meat in the article to talk about. However, I want to comment on the teacher statistics he uses. He talks about there being tens of thousands of English teachers in Japan. Fortunately, Adamu at Mutant Frog has done some research and found that the number of language instructors in Japan at the end of the 2008 was around 9,500. This is for all languages being taught in Japan, not just eikaiwa. If you factor in JETs, the number jumps to more than 10 thousand, but not tens of thousands.

If you're a regular reader of LJ, then you know that teaching English in Japan has been in the dumps for quite some time and is still in decline. The prospects for eikaiwa don't look bright when you factor in falling wages for instructors and lack of job security, the industry's tarnished image largely due to, but not limited to, the fallout from Nova's bankruptcy (lack of consumer confidence), an aging population (a shrinking customer base), and economic recession (less consumer spending and lower tax receipts putting the squeeze on local governments hiring instructors).

The series sounds promising though, so here's hoping that Dean makes the most of his columns.

TBS correspondent in Australia, Hiroki Iijima, is covering the GEOS school closures and would like to hear from you.

Help him out. Contact him at: 0419 432 758 (mobile phone in Australia) or email hiroki [at] mcmstv.com.au.

Part 1 of a two-part interview with yours truly on My TEFL Journey.

Although you once taught at an Eikaiwa, you don’t anymore. Why did you choose to leave?

A mixture of disillusionment and boredom with the job. The disillusionment came from the realization that being a salesman was more important than the teaching itself. During the hiring process in Vancouver, GEOS played up how I was beginning a career while casually throwing in, “You’re OK with approaching students and asking them to renew their contracts, right?” I wanted the job so of course I said yes.

But once in Japan, teachers and managers came and went every few months or so. There was even a stretch of at least 3 months where my school didn’t even have a manager. The weekly meetings consisted of the manager (when I had one) telling us how much we needed to make that month in terms of new student signups and contract renewals. During renewal campaigns, head office would send faxes excoriating under-performing schools, demanding that they do better. This wasn’t anything like the picture painted for me in Vancouver.

Back in 2001(my emphasis):

Around 20 companies affiliated with English-language school operator GEOS Corp. failed to declare some 280 million yen in income in the five years to March 2000, industry sources said Thursday.

This total includes 130 million yen in concealed revenues, the sources said.

Auditors at the Tokyo Regional Taxation Bureau who investigated the Tokyo-based company also found that GEOS President Tsuneo Kusunoki and his wife, who serves as vice president, failed to report more than 200 million yen in personal income in the three years through 1999, they said.

Kusunoki is suspected of obtaining part of the affiliates' undeclared income for his personal use, the sources said.

Today's The Age:

Industry insiders said the global financial crisis had hit GEOS hard and its Japanese operations were in trouble.

Even before the appointment of administrators, the Victorian education regulator had been in talks with GEOS to set up a trust fund and other arrangements that would have secured funds in the Melbourne business.

The Victorian Registration and Qualifications Authority had become concerned about GEOS following a financial audit.

The authority's director, Lynn Glover, said in a statement: ''The VRQA had discovered that the directors [two Australian and one Japanese] have been diverting revenue from GEOS Melbourne to support the operations of other holdings in both Australia and overseas.''

Do you see a connection here? What will GEOS have to say if the administrators Down Under start finding some unusual money transfers? Remember, GEOS was quick to disown its Australian schools and say that everything is fine in Japan.

News coverage in Japan has been sparse so far, sticking to regurgitating the basic facts: eight schools closed, thousands of students affected, Ernst & Young are the administrators. What's not being reported is GEOS Japan siphoning money out of its overseas schools. Jiji.com simply notes that the schools ran into financial difficulties (資金繰り悪化). Things, however, are not that simple.

This is the destruction wrought by the closures:

Bill Egerton, who is contracted by GEOS to pick up foreign students for the Surfers Paradise school in his Koala Blue bus, said: "The receivers walked in and told everyone to leave. They have closed the doors. I'm owed about $4000 from them."

Mr Egerton said there were about 260 students at the school.

He said 15 students were due to arrive this weekend but would have nowhere to go.

"These kids pay $10,000 to $15,000 each for tuition."

The Age:

AUSTRALIA'S international education industry has suffered another massive blow with the collapse of eight English language colleges, leaving 2300 foreign students around the country in the dark over their future.

The single largest group affected is in Melbourne and has an estimated 530 students unable to complete their courses. Some had just one more week before the end of their course. A total of 390 employees have lost their jobs.

[...]

Marcio Alves, 33, from Brazil, who paid $4000 and was expecting to finish his course in five weeks, said: ''I think I lost money here. In Brazil I worked for one year to save for this course.''

Pascal Fux, 40, a banker from Switzerland, paid $10,000 and said he had come to Australia in the hope of starting a new life. ''It's a country where everything should work fine, like in Switzerland … but this is a bad way to start a new life.''

The Australian:

Students and staff are owed more than $10 million in pre-paid fees and entitlements.

Worst-hit are about 1000 students who had paid GEOS for homestay accommodation and who could now face eviction.

GEOS student Joachim Adam from Germany has already been told by his landlady in Melbourne to immediately pay his weekly rent of $220 dollars or leave, even though he has already paid all his rent to GEOS.

"I must pay by this evening or I must go," he said.

Administrator Justin Walsh of Ernst and Young said remaining funds "are vastly insufficient to continue trading". GEOS was put into administration by its Japanese parent on Friday.

The Australian understands students, landlords and agents could be owed about $10 million, while the entitlements of the nearly 400 staff also run into the millions.

[...]

Mario Galindo, a 39-year-old university tutor from Colombia, paid almost $7000 for a ten-month course to improve his English. He has been left stranded with two months tuition owed.

"I thought this was a serious country . . . but now I think it was a mistake," Mr Galindo said.

Pina Vigo of West Preston in Melbourne was yesterday showing her newly arrived nephew, Filippo Zilio, from Italy, where his GEOS college was, only to find it closed. Mr Zilio, 19 had paid for a month's study.

"It stinks," Ms Vigo said. "How can they do this to the students? How can the government not know?"

This is what could be coming to Japan's shores very soon. Unlike Nova, there are no court cases to follow, no share price to monitor, and virtually no reporting in Japan. GEOS is a privately-owned company and isn't obligated to show its books to the public. If bankruptcy is in the cards, I think the end could happen quickly. There won't be months of drama unfolding on TV as with Nova's collapse. Staff and students could wake up one day to find the schools locked and shuttered.

If you work for GEOS, you have to start asking yourself, "What am I going to do if the shit hits the fan?" You need to start preparing for the worst. If you don't believe that bankruptcy will happen, ask yourself, "How long can I keep working for a company that operates with complete disregard for the well-being of its staff and students and still sleep at night?"

GEOS Judas president and CEO, Tsuneo Kusunoki has issued an apology for the closures of the eight schools in Australia. Sadly, like the brief blurb on the GEOS website a couple of days ago, Kusunoki tries to assure everyone that things are OK while denying any connection to the schools. The apology in Japanese can be found here [PDF]. Here's a quick and dirty translation.

I want to express my sincere apologies to the students, those hoping to study with GEOS, and everyone involved for causing so much anxiety regarding the placement of all eight Australia schools under voluntary administration with Ernst and Young as its administrator.

Reading between the lines, I get the sense that he's saying that none of this is his fault. Do you feel reassured?

Somewhere, a rooster is getting ready to crow three times.

Good news if you're worried about the possibility of your visa renewal being denied due to your lack of national health insurance coverage:

The Immigration Bureau is planning to change a new guideline for foreign residents to ease concerns that those without social insurance will be forced to choose between losing their visa and entering the insurance system, a bureau official said Monday.

[...]

"The bureau will delete item No. 8 by the end of March, and 'lightly mention' the need to present a health insurance card in the introductory passage of the guideline," Immigration Bureau spokesman Yoshikazu Iimura told The Japan Times. "The wording will be in a manner to eliminate foreign residents' concerns that their visas won't be renewed if they don't have insurance."

So now the Immigration Bureau will "lightly mention" that you should be
enrolled in shakai hoken or kokumin kenko hoken. Curiously, the article passes off the change as a victory:

Foreigners and their supporters have protested the new
guideline as an infringement on freedom of choice.