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

According to the Yomiuri shimbun, Nozomu Sahsahi, NOVA's disgraced and convicted ex-president, was confined in his hotel room for three days by gangsters. The police have arrested two men, one who is a member of the Yamaguchi-gumi syndicate, in connection with the incident.

Sahashi had apparently traveled to Tokyo, and when his lawyer became unable to contact him over the weekend, he went to the police. The police found Sahashi yesterday afternoon in his hotel room in Nihonbashi where they arrested two men whom they allege held Sahsahi for roughly 3 and a half hours. The men claim that they were merely with Sahashi (and that they didn't hold him against his will).

Many will be disappointed to learn that Sahashi was not injured. The police are investigating the circumstances of the incident.

Assuming it wasn't a social call, one possible reason for the "visit" may have to do with Sahashi's mysterious stock dealings as NOVA crashed and burned around him. Desperate to come up with some cash, he put his shares in NOVA up as collateral only to be swindled out of five million of them. One name that came up in the course of the dealings was Nishida Haruo, who appears to have made a career out of stock manipulation. Perhaps Sahashi owes some bad people some money. Then again, he is arrogant enough that you could not completely rule out him demanding his shares back, either.

Yomiuri article

ＮＯＶＡ元社長を監禁容疑、組員ら逮捕

経営破綻(はたん)した英会話学校「ＮＯＶＡ」（破産手続き中）の元社長で、業務上横領罪に問われた猿橋望被告（５８）（控訴中）を東京都内のホテルに監禁したとして、山口組系暴力団員の男（３８）ら２人が、監禁の疑いで警視庁三田署に現行犯逮捕されていたことがわかった。

同署幹部によると、２人は２８日午前１１時３０分頃から午後３時頃まで、中央区日本橋蛎殻町内のホテルの一室に猿橋被告を監禁した疑い。猿橋被告にけがはなかった。

猿橋被告の弁護士が、猿橋被告と２５日頃から会えなくなったとして同署に相談していた。捜査員が２８日午後３時頃、同ホテルで猿橋被告を保護し、２人を取り押さえた。２人は「一緒にいただけ」と容疑を否認している。同署はほかに共犯者がいるとみている。

猿橋被告は、ＮＯＶＡグループの社員積立金を流用したとして、２００８年６月に業務上横領容疑で大阪府警に逮捕され、先月、大阪地裁が懲役３年６月の実刑判決を言い渡していた。

(h/t to Are they the lemmings)

Old news is fun! The Japan Times reports on Yano Research's survey on the foreign language learning market in Japan, which I wrote about this at the beginning of August and touched on again earlier this month. The only difference with today's article is that the JT spoke with somebody at GEOS.

Susumu Ikegami, a spokesman for Geos Corp., which runs English-language schools in Japan and other countries, said they have been facing a serious decline.

"As the number of students decreased, the number of classrooms also declined," said Ikegami, who declined to give the figure for the classrooms.

Ikegami said the market's downward trend began about five years ago, although the reason is hard to pinpoint. However, he pointed out that the bankruptcy of Nova Corp. in October 2007 had some impact.

It's amazing that Ikegami can't figure out why business is down. You can try and blame NOVA, Lehman Brothers, or swine flu, but you can only wring so much mileage out of those excuses. The article ends with this brilliant plan:

However, Ikegami of Geos said the overall outlook for the language-school market in Japan doesn't appear bright.

"We have 53 schools overseas, and they are doing pretty well. So, while there is the chance of growth from a global outlook, we don't really have a good picture for the Japanese market. Rather than getting more students, we are working to run the business more economically," Ikegami said.

Things don't look good down the road, so let's cut costs? That's it? The market has been sliding for years and GEOS is still at the cut costs/efficiency stage? The article is titled "Few answers for the language market." Is the problem about finding answers to the downturn or the dreadful way in which eikaiwa schools conduct business?

My guess is that it's the latter, with NOVA being the straw that broke the camel's back. All the schools really care about is putting bums in chairs and vacuuming their students' wallets, and NOVA was the poster child of this kind of behavior. METI's press release　describes it in vivid detail, from pressure sales to exaggerated advertising to underhanded refund practices to outright thievery and deception. Other schools have tried to blame its instructors for the failings of the company or sue them for exercising their right to strike.

But the bad behavior doesn't stop at eikaiwa. Dispatch teaching is just as bad. Not only does the job have no benefits, instructors are disposable employees that boards of education pick and choose from and discard at will. Although teaching English looks promising in elementary schools, it should not be forgotten that the potentially lucrative job scene hinges on school budgets. BOEs with no money are more likely to stick with a Japanese teacher than hire an ALT.

The homestay business is more of the same. Gateway21 tore a page from the NOVA playbook with 950 million yen vanishing into thin air as the end result.

To put it bluntly, the rot is extensive, and teachers and students know it. But if the Susumu Ikegamis of the business can't understand why business is bad, then there's not much hope for them. What's the answer that eikaiwas should be looking for? How about: Stop abusing your employees and ripping off your customers?

Remember back in June when when some flights in and out of Japan were delayed or re-routed due to a volcano erupting in the Kuril Islands?

That was the eruption of Sarychev Peak on Matua Island. You may have seen a picture of it, such as this one from Live Science:

Source: Live Science

The International Space Station also captured the eruption on video.

Wow.

No surprise here. Sahashi officially filed an appeal of his three and a half year sentence for embezzlement with the Osaka District Court on Wednesday. Typical of his defiance during his trial and ever since he was ousted from NOVA, Sahashi asserted once again that he had acted to prevent NOVA from going bankrupt.

Asahi shimbun

ＮＯＶＡ・猿橋元社長側が控訴

2009年9月3日

経営破綻（はたん）した英会話学校「ＮＯＶＡ」（大阪市）の社員らの積立金３億２千万円を受講生への返還金に流用したとして、業務上横領の罪に問われた元社長猿橋望（さはし・のぞむ）被告（５７）の弁護人が２日、懲役３年６カ月とした大阪地裁判決を不服として控訴した。猿橋元社長は「会社の倒産を防ぐためだった」と無罪を主張していた。

From J-Cast we learn some more about the state of eikaiwa and the foreign language market in Japan. I've highlighted Yano Research surveys that illustrate the continuing contraction of the market before, and J-CAST touches on this research to show how the market is changing. Here's a summary of the article.

According to the latest government statistics (last file in the table) on selected service industries, the number of students taking foreign language lessons dropped by a staggering 52.7% between 2006 and 2008. In 2006, there were 9,562,427 students taking language lessons. In 2008, this number was 4,513,621.

In particular, big changes have been occurring in lessons for adults. Yano Research notes that in FY2008, the foreign language market contracted by 5.2% Broken down, the market for lessons for adults contracted by 9.1%, adults taking lessons as a hobby or for education fell by 17.3%, and the market for group lessons fell by 10.9%

One of the reasons for this contraction is connected to NOVA and the manner in which it conducted business with its lies, exaggerated advertising, failure to pay staff, and ultimately, its bankruptcy.

Upon NOVA's collapse, the National Consumer Affairs Center was besieged with inquiries about language schools. In 2006, they recorded 3,739 consultations, but this number jumped to 18,057 in 2007 due to some 400 thousand NOVA students being left in the lurch plus an even larger number of students at other schools who held off on signing contracts due to rumours they heard.

It's not all gloom and doom, however. The market focus is changing from students and young adults to catering to children and seniors. The good news is that there may be an uptick in demand for English lessons. English is set to become a compulsory subject in elementary schools in 2011 and a growing group of seniors may choose English lessons as something to do in their spare time.

Yano Reasearch's findings indicate that this trend is real. While English lessons for infants fell by 0.8%, the market for preschool and kindergarten-aged children grew by 8.4% Even large eikaiwa schools are getting into the act as evidenced by GABA launching its "Senior Refresh Plan" in April aimed at teaching seniors English conversation for traveling abroad.

On the other hand, the market for business English doesn't look so promising. In particular, the market for business English declined by 1.5% as companies are increasingly doing more business in BRIC (Brazil, Russia, India, and China) and VISTA (Vietnam, Indonesia, South Africa, Turkey, and Argentina ) nations where English is not necessarily the lingua franca.

Comment: Some good, some bad, but what stands out is the massive drop in the number of students. The NOVA shock partly explains the huge drop, but I wonder how the way the schools run their businesses (such as engaging in aggressive sales tactics) factors into the equation. Also in the statistics on selected service industries but not mentioned by J-CAST, is the number of instructors. In 2006, there were 13,580 instructors, of which 8,120 were full-time and 5,460 were part-time. In 2008, the total number of instructors dropped to 9,589, of which 3,729 were full-time and 5,860 were part-time. This is an overall drop of 30%, or broken down, a 54% drop in full-time instructors and a 7.3% increase in part-timers. SO the news isn't great for language schools or instructors, either. One thing is for sure: studying English has lost its luster.

Here's some video to show you what I'm talking about when I wrote about Fuji TV using The Terminator as their election theme this year:

Not to be outdone, TBS has it's own doom and gloom election special:

What's with the fire and brimstone? Barack Obama campaigned on a platform of change. It was an uplifting message that even politicians here in Japan were quick to mimic. The election tomorrow is destined to be one for the history books, but TBS and Fuji seem to be telling its viewers that change will tumultuous if not horrific. Or are they saying that this election spells the end of the LDP?

I'll be watching the coverage with morbid fascination. Will they be tallying the votes with flames and explosions?

(h/t Japan Probe)

G.communication continues to believe that the NOVA bunny has some value left in keeping it as the mascot of the company. I saw their latest commercial last night, not long after the news had broadcast that Sahashi had been found guilty and sentenced to prison. Here's the latest NOVA commercial.

I take back what I said in my last post. It's not over with Sahashi. He was released on bail last night following his sentencing. The Asahi shimbun, among other papers, carried a report of the events in the courtroom yesterday. Here's a summary of that article.

Sahashi wore a dark suit as he stood in front of the judge as his sentence was read. Upon hearing he was sentenced to 3 and a half years in prison, he lifted his head slightly and then slumped into his seat as he sat down. Although he was briefly detained after the decision was read, he paid his original bail of ¥50 million plus an additional ¥10 million tacked onto it, and was released later that evening.

NOVA grew from a single school in Osaka in 1981 to to 994 schools in 2005, but after a series of problems with refunding canceled contracts, it went bankrupt in 2007.

When his trial began in June, Sahashi apologized to the students and staff for all of the trouble caused by the bankruptcy of NOVA, but under questioning, he repeatedly stated that he had no choice but to use money in an employee's welfare fund in order to save the company.

Former NOVA staff members who testified at the trial were critical of Sahashi.

A former HR manager who oversaw the employee payroll said that Sahashi kept receiving his high executive salary right up until the bankruptcy and never once offered to return it, and added that taking money from the welfare fund wasn't unavoidable.

Another former staff member in charge of accounting pointed out that NOVA's rapid expansion was causing cashflow problems, but Sahashi was putting the blame on the staff. He apparently told staff in a meeting that if the company went bankrupt, it would be their fault. Sahashi didn't want to offer a blubbering apology like the president of Yamaichi Securities did (when it went bankrupt in 1997).

After listening to testimony during the trial, Sahashi irately told reporters that the facts were wrong and mixed with speculation.

Sahashi's lawyers, who had emphasized that he had poured over ¥600 million of his own money into the company, thought the court's ruling was terrible.

Toyomi Ashida, a 60-year old former NOVA student still waiting for a refund of approximately ¥300 thousand, said that the sentence was fair given that Sahashi selfishly used money that belonged to the employees, but was dismayed that he was no closer to recovering his money.

Many expected the trial would reveal Sahashi's thinking and why NOVA went bankrupt, but were disappointed to only receive a standard apology.

According to lawyers representing a group of former students, roughly 300 thousand students across Japan are still waiting for some ¥56 billion (nearly $600 million USD) in refunds. Ashida and 23 other former students filed a class action lawsuit against Sahashi and NOVA management last October for ¥16 million. They are hoping to question Sahashi went the lawsuit goes to trial.

Sahashi was arrested for embezzlement by the Osaka police last June, eight months after the collapse of NOVA. While he was also investigated for aggregated breach of trust for causing huge losses to NOVA, not enough evidence was found to indict him. NOVA's bankruptcy trustees, however, have long believed that the dealings that caused the loses were shady and filed suit last week seeking ¥2.1 billion in damages.

Comment: That sound you hear is the collective screams of disbelief at Sahashi being released on bail. Sahashi has indicated that he will appeal the ruling, so it's not uncommon for non-violent offenders to be released pending their appeal. More importantly, his legal woes are far from over. Even if he manages to win his appeal and get a suspended sentence, there are two more lawsuits against him. He's going to be in court for a long time. Sahashi has maintained that all he was doing was trying to save the company and repay students and staff, but that money, and hopefully the truth, is now going to be extracted from him the hard way.

Asahi shimbun

ＮＯＶＡ判決　ワンマン手法重視　元受講生「実刑当然」

2009年8月27日

かつて６千人を超す社員や外国人講師を抱え、全国展開を遂げた英会話学校「ＮＯＶＡ」。その経営トップに立ち、社員の積立金を流用したとされる元社長の猿橋望被告（５７）に、司法は「実刑」の厳しい判断を示した。元社長は沈痛な表情で判決を聴き、元受講生からは「当然」との声も上がった。

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「すべて裁判官の前で説明した。あとは正しく判断してもらうことを信じて待つしかない」。昨年７月に保釈保証金５千万円で保釈された猿橋元社長は判決前、周囲にそう語ったとされる。

しかし、裁判長が告げた主文は実刑判決。黒っぽいスーツ姿で直立していた猿橋元社長はわずかに顔を上げ、裁判官席をじっと見据えたが、着席すると肩を落とし、終始うつむいて判決理由を聞いた。約４０分の言い渡し後、いったん勾留（こうりゅう）されたが、２６日夕方、保証金１千万円の追加で再度の保釈が認められた。

８１年、大阪・心斎橋に第１号を開校。「駅前留学」「お茶の間留学」といったキャッチフレーズを打ち出し、０５年には９９４店にまで店舗を広げ、ワンマン経営の組織を作り上げた。だが受講生と解約をめぐるトラブルが続き、資金繰りが悪化し、０７年に破綻（はたん）した。

６月の初公判。元社長は「倒産で多くの生徒や社員に多大なご迷惑をかけたことを深くおわびします」と頭を下げた。だが被告人質問では、社員の積立金を使ったことは会社存続のためやむを得ない判断だったと繰り返した。

組織につかえた元社員らは、証人に立ったこれまでの法廷で元社長を批判した。

社員の給与を管理していた元人事管理課長は「破綻の直前まで高額な役員報酬を受け取り、自ら返上しようとはしなかった。流用がやむを得ないとは思わない」と語った。

元経理課長は「急激な拡大路線で資金繰りが追い付かなくなった」と指摘。元社長が社内の会議で「会社が破綻した場合は君たちの責任だぞ。私は（９７年に破綻した）山一証券の社長みたいに泣くのは嫌だぞ」と発言したという話を明かし、「部下に責任を押しつけた」と述べた。

被告席の猿橋元社長は顔をこわばらせて証言を聴き、閉廷後に「事実とは異なる」「憶測が混じっている」と報道陣に憤ることもあった。

２６日の判決後、個人資産６億円以上を会社に投じたことを強調していた元社長の弁護人は「ひどい判決だ」と不満を述べた。

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実刑判決について、授業料約３０万円が返還されずにいる元受講生で京都市に住む介護施設職員、芦田豊実（とよみ）さん（６０）は「社員の金を勝手に使ったのだから当然だ。ただ、授業料が戻ってくるわけでもなく、むなしい」と話した。

元受講生にどんな思いでいるのか、なぜ会社を破綻させてしまったのかを、元社長が公判でどう語るかに期待していた。「結果的には型通りの謝罪だけで終わってしまった。残念でならない」

元受講生の被害対策弁護団によると、授業料が返還されていない元受講生は全国に約３０万人、その額は約５６０億円にのぼる。芦田さんら元受講生２４人は昨年１０月、元社長を含む当時の経営陣らに授業料など計約１６００万円の賠償を求める初の集団訴訟を大阪地裁に起こした。今後、訴訟で元社長の証人尋問を求めることも検討したいという。

猿橋元社長は破綻から約８カ月後の昨年６月、大阪府警に今回の事件で逮捕された。府警は、元社長が関係先との不当な取引でＮＯＶＡに多額の損害を与えたとみて、特別背任容疑も視野に捜査したが、違法性を裏付ける証拠が集まらず立件は見送られた。破産管財人は今月１９日、この取引をめぐって元社長に約２１億円の賠償を求める訴訟を大阪地裁に起こしている。

I'll keep this short and sweet: The court found Sahashi guilty of embezzling money from NOVA's employee welfare fund and sentenced him to three and a half years in jail.

According to the ruling, on July 20, 2007, Sahashi withdrew ¥320 million from NOVA's shayuukai welfare fund, converted it into cheques, and then deposited the money into an account held by NOVA Kikaku, a company that he controlled.

You will recall that Sahashi admitted to pilfering the fund, but since he was using the money to refund canceled contracts, his lawyers maintained that he did nothing illegal.

The Mainichi article ends with a few factoids about NOVA, the most important being the debts it had:¥86 billion ($913 million USD at current exchange rates). That's money that students and instructors will probably never see again.

The drama surrounding Sahashi is over for now. Three and a half years is probably not nearly enough for those who experienced NOVA's collapse.

Mainichi shimbun

ＮＯＶＡ破綻：猿橋元社長に懲役３年６月　大阪地裁判決

経営破綻（はたん）した英会話学校「ＮＯＶＡ」（破産手続き中）の社員積立金を流用したとして、業務上横領罪に問われた同社元社長、猿橋（さはし）望被告（５７）に対し、大阪地裁（樋口裕晃裁判長）は２６日、懲役３年６月（求刑・懲役５年）の実刑判決を言い渡した。

　判決によると、猿橋被告は０７年７月２０日、ＮＯＶＡグループ社員の互助組織「社友会」の預金口座に積み立てられた３億２０００万円を別口座に入金。同額の小切手に換え、関連会社「ノヴァ企画」の口座に入金し、横領した。

　猿橋被告は公判で「事実関係は間違いないが、社員積立金を使ってはいけないという意識はなかった」と述べ、弁護人は「生徒への解約払戻金を支払うためで、不法領得の意思はなく、業務上横領罪にはあたらない」と無罪を主張していた。

猿橋被告を巡っては、ＮＯＶＡの破産管財人が今月１９日、「不要な取引を繰り返し、損害を与えた」として、約２１億３６００万円の賠償を求める訴えを大阪地裁に起こしたほか、６月には特別背任罪で大阪地検に刑事告発している。

ＮＯＶＡは８１年、前身の「ノヴァ企画」として猿橋被告が創業。一時は全国に約１０００店舗を構えたが、中途解約をめぐるトラブルなどで資金繰りが悪化し、０７年１０月に破綻。受講生約３０万人が前払い受講料の払い戻しを受けられなくなるなどの被害を受けた。負債総額は約８６０億円だった。猿橋被告は昨年６月に逮捕され、翌月に保釈保証金５０００万円を納め、保釈された。【牧野宏美】

毎日新聞　2009年8月26日　14時51分

There are times when I think about resurrecting the Ask the Sensei column. Today is one of those times. There appears to be an endless supply of bright-eyed and bushy-tailed university graduates desperate to work in Japan. The latest request for work to land in my inbox comes from Josh.

I found your site through google by typing in "I want a Japan job". I'm in Canada right now and I've been trying to get a Japan job teaching adults for a while now. I have over 4 years of English teaching experience in South Korea. I also look good with a smile and a suit on me. Plus, I have the CELTA certification.

Can you find it in your hearts to help me through your various connections?

If you want, I can send you a recent smiling, suited up photo and my resume.

Thank you for your time

Josh, thanks for the note. Glad to hear you found Let's Japan by typing "I want a Japan job" and scrolling passed all of the job advertisements until you hit LJ.

I'm glad to hear that you can smile and that you look good in a suit because these are two crucial qualities that make an eikaiwa instructor. It's also good you appear to be motivated because that's perfect for teaching seven classes in a row in a highly competitive environment where you need to sell, sell, sell! Might I suggest investing in a plastic hammer and adding a ball toss game to your repertoire if you haven't don so already?

Sadly you've come to the wrong place. LJ isn't in the business of helping people find jobs. You say you have CELTA. Any qualifications or certificates you have will be wasted teaching eikaiwa. Anyway, it sounds like you missed 2007. Not only has the teaching English market been contracting for the past two years, it's flooded with teachers fighting for low-paying jobs. May I ask why do you want to teach in Japan? You need to seriously think about that question. Eikaiwa is drudgery.

PS. No need to send me a picture of your smiling mug. I don't swing that way.