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

Eight months after the collapse of NOVA, Sahashi was finally taken into custody this morning by the police for "voluntary" questioning over his alleged embezzlement of an employee's fund. The police are expected to arrest him.

The Japan Times fleshes out the story:

The labor ministry's regional bureau in Osaka is planning to send information to prosecutors possibly later this week on Nozomu Sahashi, former president of Nova Corp., on suspicion of nonpayment of wages to language instructors, sources said Monday.

The Osaka Prefectural Police are separately planning to launch investigations to build a criminal case against Sahashi, 56, for alleged embezzlement of fringe benefit provisions for employees at what was once the largest English-language school chain in Japan, the sources said.

According to the sources, the allegations by the labor bureau concern a total of around Y100 million that should have been paid last September and October to around 400 instructors and staff members nationwide who worked for now-bankrupt Nova.

The amount represents one of the largest cases of nonpayment of regular wages ever.

However, the allegations constitute only a part of wage nonpayment at Nova. During the two-month period, it is known that around 8,000 employees did not receive salary payments totaling Y1.8 billion.

The unpaid wages are thought to be as high as Y4.1 billion in all if the period after October, when Nova went bust, is included.

[...]

However, the labor bureau believes Sahashi bears criminal
responsibility for the suspected violation of the Labor Standards Law, given that he continued to operate Nova even though he had no prospect of paying the wages for its workers, they said.

The bureau is not seeking to hold other executives liable because Sahashi was in full control of management, the sources
said.

That's embezzlement plus nonpayment of wages. No doubt it's going to get worse for Sahashi once the police examine his stock dealings.

Sahashi is making some dubious history here. Not only did he preside over the biggest post-war consumer fraud, but he's also responsible for one of the largest nonpayment of wages in Japan.

An astute comment from the forums:

After this long a wait, it reminds me of when they pulled Saddam Hussein out of that spider hole ...

My guess is that the benefit of going in for "voluntary" questioning is that he can get arrested inside the police station and not have to be seen on TV in the back of a cop car covering his face.

A lot of people would love to see Sahashi's perp walk.

Video

The first video quotes part of a statement from Sahashi to police in which he asserts that he believed that he could get the company back on its feet up until he was ousted and that he would be able to return the money he took.

The second video presumably quotes the same statement. Sahashi says he appeared before the police so that he could be publicly judged. He says he acted in the interests of the company wants the employees to know that he didn't take the money for himself.

UPDATE: The Asahi Shimbun is reporting that Sahashi has been arrested for embezzlement.

UPDATE 6/25: The Mainichi reports that along with with Sahashi, the head of NOVA Kikaku, Toshihiko Murata, was also arrested for embezzlement. The article says that while Sahashi denies some of the allegations against him, Tamura admits to them.

The Japan Times also has an article about the arrest.

Repeating the same line of argument as Sahashi's statement, the lawyer argued that the fund was used to refund tuition fees to students who had canceled their contracts.

"I don't see any logic in claiming that company employees became the victims" of the refund system, he said, suggesting that Sahashi's actions were based on his responsibility as Nova's president and not dictated by personal interest.

The lawyer also said Sahashi has been ready since late May to cooperate with police if summoned for an interview.

The news of police action against Sahashi largely drew a cool response from former employees and teachers, who indicated that it was expected.

The president "never offered an apology to employees" over the firm's collapse, a former Nova employee said. "My impression of Sahashi is that he did whatever he wanted, saying 'that's for the company's sake.' "

He added that the arrest is only the first step in a full investigation into the company's collapse.

Fionna Macrae, an English teacher now working for another language school chain, expressed hope that Sahashi's arrest would uncover Nova's mistreatment of employees and teachers.