AFTER having been in financial trouble for months, Nova Corp., Japan’s largest English language school chain, which accounted for nearly 60 percent of the English language school market in Japan, recently filed for court protection and suspended the operation of all its schools. Unless it finds a sponsor within one month, it is likely to file for bankruptcy. Nozomu Sahashi, the company’s founder who was sacked by the school board on October 25 has disappeared from public view.
More than 300,000 students had paid 40 billion yen ($350 million) for tuition in advance. Under the Japanese Corporate Rehabilitation Law, repayment of prepaid tuition is ranked below payment of unpaid salary and loans from financial institutions. Therefore, it appears that it will be difficult for students to be fully reimbursed.
Nova’s problems stem from an ill-conceived expansion across Japan, backed by a massive advertising campaign. It was unable to recruit enough experienced teachers and many students defected to rival schools after complaining about the poor quality of Nova’s language courses. Nova said a rapid expansion has lowered its profitability and a government penalty to curb taking on new students has hit revenues.
The 900 British teachers, a similar number from Australia and about 1,300 from the US have been plunged into legal limbo. For many the lack of salary could leave them homeless within a few days because their rent is paid direct to landlords by the company.
The British embassy in Tokyo has received dozens of calls from worried teachers and has set up an advice page on its website. “We are doing everything we can in terms of consular support and advice but the one thing we can’t do is providing direct financial assistance,” an embassy spokesman said. The embassy is putting British teachers in touch with a travel agency that has agreed to provide cheap flights to the UK. The Australian government has asked its national carrier Qantas to offer reduced airfare for a limited period to Australian Nova employees wishing to go home.
