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

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. The Asahi Shimbun reported on June 13:

Suspicions of political meddling have surfaced with revelations that a ruling party lawmaker accompanied the president of language school chain Nova Corp. to a meeting with Osaka Mayor Junichi Seki amid a court battle over the company's refund system.

City government officials have confirmed that Nova Corp. President Nozomu Sahashi arranged for LDP Lower House member Yasuhide Nakayama to accompany him when he met with Seki last year.

Nakayama, who was elected from an Osaka constituency, has acknowledged he vouched for Nova during the meeting. He also recalled saying at the time that it was "not right by social norms that Nova's refund rule is unacceptable."

And:

Officials said Sahashi and Nakayama visited the mayor on the morning of May 22 last year.

The Nova president explained that the case was being fought in the Supreme Court and that Nova was in discussions with the Ministry of Economy, Trade and Industry on Nova's refund system, officials said.

Nakayama admitted that he had arranged the meeting with the mayor and also accompanied Sahashi at the Nova president's request.

The lawmaker confirmed that during the meeting he said he found no fault with Nova's refund system.

"It is a politician's job to help out when a supporter is in trouble," Nakayama explained. "I never intended to exert any pressure."

So here were have Nova in legal hot water and Sahashi and Nakayama decide to visit the mayor of Osaka just for the hell of it. Ya, right. It's amazing how shit flows from the mouths of politicians like a river.

On Friday the 22nd, the Asahi Shimbun reported that LDP Lower House member Yasuhide Nakayama met with the head of the Ministry of Economy, Trade and Industry, Akira Amari. Nakayama admitted to meeting with Amari after hearing of Nova being raided, but he denied trying to influence the investigation

According to officials, Nakayama met with Amari on February 22, eight days after Nova was raided. Nakayama was said to have explained that refusing discounts on bulk purchases didn't make sense and that Nova's refund policy was still in question since it was still before the Supreme Court. He also called for the Specific Commercial Transaction Law to be revised saying that the decision of the Supreme Court would have a serious consequences for Nova.

Amari replied that there were over a thousand complaints a year about Nova to which Nakayama replied, "It would be a problem if it were one thousand complaints at one school, but Nova is a large company and lots of complaints are to be expected." Nakayama later reported his meeting to Sahashi.

The myth that Nova is somehow a large company needs to be put to rest. Nova may be the largest English conversation school in Japan, but according to the METI press release on Nova's punishment, Nova is only capitalized at 5 billion yen, or about $40 million USD. That makes Nova a microcap stock.

The Asahi article goes on to say that Amari and Nakayama only spoke in general terms, not about specific cases, and that Nakayama had not intentionally tried to influence things.

At a press conference, Asahi reported Amari admitted that Nakayama had visited him immediately after METI had raided Nova where they talked about the legality of Nova's discounts for long-term contracts.

And the Nova story gets even fishier when you take into account this story from The Daily Yomiuri:

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, The Yomiuri Shimbun has learned.

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.

According to the board, three firms, including Nova, participated in public bidding to supply ALTs to 116 middle schools and other schools on March 17, 2006. However, the tender was unsuccessful as all three firms placed bids higher than the target price. The board conducted the second public tender, with a higher target price, the following month. Two firms, including Nova, which had participated in the first tender, and another firm placed bids, with Nova's matching the ceiling price.

Somehow we're supposed to believe that this was all a coincidence.