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Teaching for food? Why this PR stunt is a bad idea

I am completely at a loss trying to understand this Japan Times article concerning former Nova teachers conducting lessons in exchange for food.

Thus far, I have been very careful not to criticize the Nova union, or anyone else whom I think is honestly trying to help people who have found themselves in a bad position, but this boneheaded PR stunt deserves comment. Read more

Former Nova CEO Saruhashi on why Nova went under: Bad quality instructors and the broken reservation system

The current issue of Shukan Diamond includes an interview with former Nova CEO Nozomu Saruhashi (Only an excerpt is published online). This part caught my eye:

What do you think was the cause of Nova’s bankruptcy?

The Ministry of Trade, Economy and Industry raided Nova on February 14, 2007. Although they didn’t say why, according to an internal investigation report METI inspectors were gathering evidence concerning the bad quality of instructors 「講師の質の悪さ」 and problems with students being unable to reserve lessons. At any rate, the inspectors finished in a few hours and I did not think their activities would lead to any form of serious punishment.

This is the first we’ve heard of METI being concerned with “bad quality of instructors” - and I think we’ve followed the story pretty closely. Has anyone heard anything about this, or know if Saruhashi is referring to whether or not Nova had documents on those instructors who had been arrested for drug possession in Roppongi? If that’s what he’s referring to, why wouldn’t the Ministry of Justice or the National Police Agency be looking for such information?

For an English translation of the full article, please check out Let’s Japan, where Shawn has done his magic.

JEN with this week’s Metropolis cover story on Nova

This week’s print edition of Metropolis, which is set to come out tomorrow, includes an article I wrote on November 1 concerning the Nova situation. The article is up online now at the Metropolis website, and there’s also an interview with me that was recorded on November 6 on this week’s edition of the Tokyo Metpod, in Part 2.

G.communication announced as sponsor for Nova

It looks like the speculation from the Nikkei article from a few days back turned out to be spot on, at least so far. On Monday, the Nikkei wrote that given Nova’s financial situation, a breakup of the company would be possible, and, “With a thorough evaluation of its assets yet to be conducted, listed companies would likely hesitate to come to its rescue.”

A sponsor for Nova was announced tonight, which is good news. However, it falls far short of looking like a setup that will provide enough jobs now, and thus the plan is less than what we could call encouraging, and the details we’ve seen so far leave us wondering what sort of further offers might follow through, if any are even going to be possible from this point.

As the Nikkei predicted, Nova’s first announced sponsor is not a listed firm. It is privately held G.communication of Nagoya, which is a Kabushiki Kaisha that is 74.35% held by its founder and president, Masaki Inayoshi. According to his bio, Mr Inayoshi was born in Aichi Prefecture on July 3, 1969 and graduated from the faculty of literature at Aichi Gakuin University in 1992. He founded Gambaru Gakuen in 1994 and incorporated G Communications in 1996 (1997 according to the company information page).

Read more

Discount education simply does not work; neither does blind trust in food makers

I just read an editorial/article on Nova that struck me as so-so at best, but one quote really stands out, and tells the story in six simple words:

“Discount education simply does not work.”

Let’s see how that gets applied to the food industry in the coming weeks and months. From a different article on problems with safety in Japan’s food industry:

“I was always wary of Chinese products but now I feel I can’t trust anybody, especially after Arafuku.” - Tokyo housewife Naoko Shimoda

So…Snow Brand, Nippon Ham, Meat Hope, Fujiya, Ichiya, Shiroi Koibito, Hinaidori, and McDonalds Japan (which managed to keep its 2002 food scandal very quiet) didn’t bother you? It took problems at Akafuku to make you realize something is going on?

A sponsor for Nova? The Nikkei remains doubtful

Over the weekend, a few articles came out hinting that Nova’s bankruptcy administrators might be making some progress in finding a ’sponsor’ to guide the firm towards rehabilitation. The Japan Times reported on Sunday that twelve firms had stepped forward to apply for sponsorship of the firm.

The source? The bankruptcy administrators themselves. The interested parties? Well, they’re not named. Third party verification of the claim? There’s none.

The last time four firms were named as potential sponsors of Nova, three of them quickly stated that they were not interested, weren’t considering such a move, and had no idea of why their name even came up. The fourth, Yahoo Japan, didn’t even bother to comment publicly on the issue.

Of course, it’s not impossible that someone will step in and take over Nova’s operations, or some part of it. To tell the truth, I would be a tad surprised if someone didn’t have a go of it. The Nikkei would be less surprised than me. In a Monday article entitled Nova Having Tough Time Finding Sponsor; Breakup Possible, the Nikkei says that Nova’s bankruptcy administrators are having a ‘tough time’ finding a sponsor for the firm, and that any listed firms would be unlikely to come to the aid of a company where the assets are in such disarray.

How broke is Nova? Read more

The Emperor’s Old Clothes: Former Nova President Saruhashi’s office/digs on the evening news

Former Nova President Nozomu Saruhashi apparently spent somewhere between 60 and 70 million yen on his private office, which doubled as a living suite, complete with a sauna.

Here’s the Emperor’s old clothes on NHK News from Tuesday night:

It looks as if the bankruptcy administrators are trying hard to separate Saruhashi from the company he ran. This is probably in the hopes that someone will step in and buy what’s left of Nova. The administrators claim that there are interested parties, but no names were given - giving out names didn’t seem to work so well last time. This time we might not even get to hear the denials of interest at press conferences.

There will be those who say, “So what? CEOs spend tons of money on offices.” True. But it seems that’s not what the people administering this bankruptcy want heard on the evening news.

And then there was one: Two more potential Nova buyers say no

We heard the names Marui, Aeon, Rakuten and Yahoo tossed around as potential buyers (or ’sponsors’) for Nova. Then Marui basically said they weren’t interested. Tonight, an article in the Asahi Shimbun tells us that Aeon and Rakuten are out as well. Actually, it turns out they were never in - or perhaps have ‘never been in’ since allegations of securities fraud arose this morning.

From Aeon President Okada: “当社のショッピングセンターにＮＯＶＡの教室が入居しているから名前が挙がった� けなのでは。まったく考えていない。”
“Our name came up because Nova has locations in some of our shopping centers. We’re not thinking about it at all.”

From Rakuten President Mikitani: “何で名前が挙がったのか、正直意外� 。検討するには難しいと思う。”
“Why did our name come up? It’s honestly surprising. I think it would be difficult for us to consider [supporting Nova].”

“Difficult” in this context usually means something along the lines of, “Umm…no.”

Will Yahoo even bother rejecting the offer?

Mainichi: Saruhashi dumped his Nova shares by September 30; Nishida: I arranged the Nova equity warrant sale; Saruhashi: I’ve never heard of Nishida

There has been some speculation going on as to how former Nova President Nozomu Saruhashi was reported to hold somewhere in the neighborhood of 20% of the firm’s shares by last Friday. As anyone following the Nova case knows, Saruhashi, along with holding company Nova Kikaku, was always assumed to be the majority holder of Nova’s shares.

He was. The Bloomberg box told us that Nova’s top shareholders were as follows:

1. Nova Kikaku 35.94%
2. Saruhashi, Nozomu 35.47%
3. Roots 11.82%
4. Saruhashi, Hikaru 3.83%
5. Saruhashi, Izumi 1.93%

We’re forced to wonder how and when Saruhashi cashed out, and whether or not it was legal. First of all, according to a notification from the Financial Services Agency in March, any transaction involving a purchase or sale of 5% of a listed firm must be reported on EdiNET (Electronic Disclosure for Investors’ NETwork).

Nova’s code at EditNET is 941240. As of this morning, no sale from Saruhashi has been reported.

So…when were the shares sold? According to today’s Mainichi:

It has emerged that the stake held by NOVA Kikaku and Sahashi had declined to 3.69 percent and 16.02 percent, respectively, by Sept. 30, totaling 19.71 percent. Neither Sahashi nor NOVA Kikaku has submitted a report on the sale of the shares.

Emphasis added. There’s not much of a point in even checking EditNET or Bloomberg. The sale was not reported within five days. According to the FSA’s document from March, failure to properly disclose any transaction involving greater than 5% of a listed firm is a violation of the Securities and Exchange Law.

Also according to the Mainichi: Arrested stock price manipulator Haruo Nishida told the paper on October 11 that he was involved with setting up the sale of Nova’s equity warrants, saying, “I helped set them up. I was just about to do it (get involved with NOVA shares) and was heading off to Britain (in connection with that), but the Osaka district prosecutors stopped me, so I couldn’t go.”

So, the Mainichi sat on this info for 18 days?

Perhaps they couldn’t verify it. After all, last Thursday, Saruhashi told the Mainichi, “I’ve never heard of Nishida, nor have I met him. A lawyer was dealing with the funds and I’ve heard the lawyer has had nothing to do with him, either.”

Note: EdiNET of course has a frustratingly stupid user interface and does not properly process GET variables from an HTML form.

JEN at Metropolis on the Nova situation

I have another writeup on the Nova situation published over at the Metropolis website. It’s different than what was published here this morning. I encourage everyone to read the piece over there, and check out their very cool website, especially the Metpod, their podcast.

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