Three years after the collapse of Nova, there is finally some closure on the matter. Teachers are being paid the money owed them when the company went under, and ex-president Nozomu Sahashi will at last be behind bars after the Osaka High Court sentenced him to two years in prison for "corporate embezzlement."
The former president of English conversation school Nova was handed a two-year prison sentence for corporate embezzlement by the Osaka High Court on Dec. 2.
Nozomu Sahashi, 59, had been convicted of the offence by a lower court and sentenced to a three-year, six-month prison term in August last year. The high court decision on Sahashi's appeal confirmed his conviction for embezzling money from employees, but reduced the sentence as the funds were used to pay back customer deposits and Sahashi did not himself profit from taking the money. Sahashi intends to appeal.
While he intends to appeal, he doesn't appear to have a very strong case. Sahashi has long maintained that he took money from the Shayukai employee welfare fund to pay refunds and save the company. The problem with companies like Nova, where every aspect of their operation is controlled by the president, is that they have no concept of corporate governance. The company is theirs and any money in it can be used for any purpose. This is the essence of Sahashi's defense:
Sahashi's defense counsel argued that "The Shayu-kai did not exist as an independent entity, but was just one part of the company. The entire sum withdrawn was set aside for refunding customers, and thus was not embezzled." Furthermore, "If Nova had not been able to refund its customers, it would have gone bankrupt, and Mr. Sahashi fully intended to return the funds once the company attracted new investment."
That's some strange logic given that the game was over the moment Nova's fraud was exposed. Nova had close to $1 billion in debts and liabilities when it went bankrupt. Using the money from the Shayukai didn't stop the collapse. While Sahashi's lawyers did manage to knock 18 months off the sentence, I think it's safe to say that the final chapter of the story of Nova has been written, but like many drawn-out dramas, a lot of people will be disappointed with the ending.