Nova to decide on support by next week; shows president's luxury office to media

OSAKA — Nova Corp, the collapsed largest foreign language school chain in Japan, wants to make a decision by next week on the selection of a supporter for its rehabilitation, a court-appointed Nova administrator said Tuesday. The administrator, Toshiaki Higashibata, said Nova has started negotiations with companies willing to support it, although he did not disclose their names.

Nova held talks in Tokyo with a company on Monday and in Osaka with two companies on Tuesday, Higashibata said at a news conference, adding there are some other firms that have offered support or showed willingness to take over part of Nova's operations.

Higashibata also said former Nova President Nozomu Sahashi, 56, sold all his shares in two firms under his effective control to one person around the time Nova filed for protection from creditors.

One of the two companies is an Osaka-based firm from which Nova purchased language school materials for sale to students, Higashibata said.

He said the Osaka company sold such materials to Nova at prices far higher than their original procurement prices. Nova had paid a total 8.2 billion yen to the Osaka company in the five years since 2002, he added.

"We understand there was a scheme to funnel money" to the Osaka company, Higashibata said.

He said there is a possibility that criminal charges could be brought against Sahashi for aggravated breach of trust.

The whereabouts of Sahashi, dismissed from the Nova board last Thursday, remains unknown.

Higashibata also allowed the media inside the Nova president's room at the company's administrative headquarters in Osaka. "We show this as an example of his (Sahashi) calling the company his own," he said.

At the back of the red-carpeted reception room of the 330-square-meter executive suit on the 20th floor of the building is a luxury private space including a dining room with a large-screen TV, a bathroom with a sauna, a Japanese-style tea room and a room with a double bed.

The Ministry of Economy, Trade and Industry ordered Nova in June to suspend some of its operations as it judged the school's TV commercials were exaggerated.

Since then, Nova's student enrollment, which peaked at 480,000 in fiscal 2005, has declined rapidly and the company has delayed payments to employees.