I take back what I said in my last post. It's not over with Sahashi. He was released on bail last night following his sentencing. The Asahi shimbun, among other papers, carried a report of the events in the courtroom yesterday. Here's a summary of that article.
Sahashi wore a dark suit as he stood in front of the judge as his sentence was read. Upon hearing he was sentenced to 3 and a half years in prison, he lifted his head slightly and then slumped into his seat as he sat down. Although he was briefly detained after the decision was read, he paid his original bail of ¥50 million plus an additional ¥10 million tacked onto it, and was released later that evening.
NOVA grew from a single school in Osaka in 1981 to to 994 schools in 2005, but after a series of problems with refunding canceled contracts, it went bankrupt in 2007.
When his trial began in June, Sahashi apologized to the students and staff for all of the trouble caused by the bankruptcy of NOVA, but under questioning, he repeatedly stated that he had no choice but to use money in an employee's welfare fund in order to save the company.
Former NOVA staff members who testified at the trial were critical of Sahashi.
A former HR manager who oversaw the employee payroll said that Sahashi kept receiving his high executive salary right up until the bankruptcy and never once offered to return it, and added that taking money from the welfare fund wasn't unavoidable.
Another former staff member in charge of accounting pointed out that NOVA's rapid expansion was causing cashflow problems, but Sahashi was putting the blame on the staff. He apparently told staff in a meeting that if the company went bankrupt, it would be their fault. Sahashi didn't want to offer a blubbering apology like the president of Yamaichi Securities did (when it went bankrupt in 1997).
After listening to testimony during the trial, Sahashi irately told reporters that the facts were wrong and mixed with speculation.
Sahashi's lawyers, who had emphasized that he had poured over ¥600 million of his own money into the company, thought the court's ruling was terrible.
Toyomi Ashida, a 60-year old former NOVA student still waiting for a refund of approximately ¥300 thousand, said that the sentence was fair given that Sahashi selfishly used money that belonged to the employees, but was dismayed that he was no closer to recovering his money.
Many expected the trial would reveal Sahashi's thinking and why NOVA went bankrupt, but were disappointed to only receive a standard apology.
According to lawyers representing a group of former students, roughly 300 thousand students across Japan are still waiting for some ¥56 billion (nearly $600 million USD) in refunds. Ashida and 23 other former students filed a class action lawsuit against Sahashi and NOVA management last October for ¥16 million. They are hoping to question Sahashi went the lawsuit goes to trial.
Sahashi was arrested for embezzlement by the Osaka police last June, eight months after the collapse of NOVA. While he was also investigated for aggregated breach of trust for causing huge losses to NOVA, not enough evidence was found to indict him. NOVA's bankruptcy trustees, however, have long believed that the dealings that caused the loses were shady and filed suit last week seeking ¥2.1 billion in damages.
Comment: That sound you hear is the collective screams of disbelief at Sahashi being released on bail. Sahashi has indicated that he will appeal the ruling, so it's not uncommon for non-violent offenders to be released pending their appeal. More importantly, his legal woes are far from over. Even if he manages to win his appeal and get a suspended sentence, there are two more lawsuits against him. He's going to be in court for a long time. Sahashi has maintained that all he was doing was trying to save the company and repay students and staff, but that money, and hopefully the truth, is now going to be extracted from him the hard way.