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G.com Conned

The March 19th edition of the Toyo Keizai magazine reports an embarrassing situation for G.communication.

According to the article (see attached PDF), G.com was looking to raise to some money last October, so it sought financing from Yohohama-based BOW Networks and put up a sizable chunk of its shares in G.Taste, G.Networks, and Yakiniku Saki as collateral. The shares amounted from around 4 to 10 per cent of G.com's issued stock and had a value at the time of about 500 million yen.

When G.com never got its shares back, they realized that something was wrong. The office that BOW Networks had near JR Shin-Yokohama Station was empty. The landlord said that they were four months behind on their rent. Registered mail sent to the president's residence was returned marked, "Unknown address."

Who are or were BOW Networks? The company was set up 20 years ago in Miyazaki Prefecture and originally sold golf equipment. The company moved its headquarters to the Kanto area 11 years ago and apparently has been dealing in security devices ever since.

Why would G.com go to them for half a billion yen? When G.com took over Nova and started expanding its business, it became a member of the Incubator Bank's small and medium business network and used it to finance its growth. But when the bank collapsed last September, it needed to find another backer.

Initially, Hanshin Shuhan, a Kobe-based liquor distributor, was named as a potential sponsor. While Hanshin Shuhan apparently liked to tout itself as a mover and shaker, the reality was that it had little money. Even though it acted big in putting up Asrapport Dining's (a JASDAQ-listed company it owned) shares as collateral and applied for 400 million yen from the Incubator Bank, the company was just barely scraping by.

So it comes as no surprise that talks between G.com and Hanshin Shuhan fell apart at the end of last year, and now someone has absconded with G.com's shares. G.com is apparently refusing to divulge any further details about what happened, but Toyo Keizai wonders if the breakdown in talks and missing shares aren't connected somehow.

Comment: There you have it. G.communication is the largest eikaiwa in Japan after snapping up Nova and GEOS, but it apparently gambles with its money and associates with shady businesses. Isn't that comforting to know? Then again, as I've talked about often here, poor management isn't just a failing of eikaiwa, it's a feature.

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Comments

This is insane. G. Comm cannot comm in any basic sense of the word. Wow. I need to go to the toilet as I am number 2 on this comments board. Never been here before.

Haha!

Even better is the GEOS newsletters are out. Ignoring the typical b.s. That we all know about, they are now reporting school "student numbers.". Why now and not before? Because these are FORWARD CONTRACT numbers for the summer busy season!!!! Not numbers for now. And they include one-hour tutoring contracts and other "students" prior to refunds and cancellations. Based on these numbers, which we all know are inflated, things do not look good for many of the schools. Places like New York need a lot more students in the sumner to pay the bills, especially going into winter.

That is hilarious!!! gcomm, GEOS, and Nova are so damn incompetent and corrupt. Can they be anymore idiotic?!?!?! Where is the Japanese government in all this? In bed with hpthem, that's what.

The collapse is comng!

Ah, how sublime the universe is!

The prophecy was foretold, and behold, the prophecy comes true (again, as it has, again, and again, and again and again, in the past).

Future punters on Eikaiwa take note, and remember, He who gambles on Eikaiwa, Loses the Bet.

EIKAIWA = STOP SIGN = WRONG WAY = DANGER, DANGER, DANGER = DO NOT ENTER

Nuff said.

Even better is the GEOS newsletters are out. Ignoring the typical b.s. ... .

What has this got to do with G.com getting scammed? Find somewhere else to post about GEOS NA, please.

Is this to do with the Nova, Geos side of things at all? I thought G Com and Nova went their seperate ways last year. Still it's hell a shady.

Newsletters? Irrelevant!

Is this to do with the Nova, Geos side of things at all? I thought G Com and Nova went their seperate ways last year. Still it's hell a shady.

.

G.education, which runs Nova, was split off from G.communication and taken over by Inayoshi Capital Partners. However, G.communication subsidiaries continue to run Nova schools and in some cases actually employ the teachers. I thought G.com would try to get rid of all its eikaiwas when Harushin Shuhan became the main shareholder, as they were only interested in G.com's food and drinks businesses, but that deal seems to have fallen through. So who knows what's going through their heads, if anything.

I thought I had followed this through, but maybe not.

The last I remembered, G.Comm was bought by Harushin Shuhan, which is the owner of the Matsuya. Inayoshi Capital Partners was to spin off the part of G.Comm that related to Eikaiwa, which is what Inayoshi's focus is.

So Nova and GEOS would be separate from G.Comm and Harushin Shuhan. But Shawn, you are saying that the Harushin G.comm still kept its hands somehow in the matters of the Eikaiwas?

It really sounds like a giant shell game, where one friendly lender (Incubator Bank) yanked away the honey pot, and now some shady dealer has absconded with shares in bearer form?

Time for the responsible Ministry to crack down on all of this. A country reeling from a triple whammy has no time for consumer/education service issues like this.

The G.Comm deal with Hanshin Shuhan never went through.

There you have it. G.communication is the largest eikaiwa in Japan after snapping up Nova and GEOS, but it apparently gambles with its money and associates with shady businesses.

Possibly not the largest eikaiwa in Japan any more. It looks as if G.com companies only own about 50 or so of the Nova schools these days, but the G.education website says there are 646 schools open and G.education is a different company nowadays. So what G.com losing all that money means to Nova schools remains to be seen.

To me, it's not clear what happened to the GEOS schools.

On the graph I have been keeping of METI data, latest post linked here, there seems to have been no sharp drop off in the number of Eikaiwa schools last year. Most of the "excitement", so to speak, in the chart, had to do with Nova.

The pink line near the bottom represents the number of "outlets", that I take to be school locations. So Nova would have counted as a big number like 800, not simply "1".

When GEOS went to meltdown, I expected to see a similar drop. Notice, by the way, that revenue per class held is on a steady uptrend. As the industry shakes out, it could be that the legitimate Eikaiwas are showing through. The legitimate ones are those who pay their staff and who have a following in their communities.

Whatever Inayoshi is doing, I am surprised that the new government has been riding him harder. I think he took over Nova as a favor to the old government (because it was generating negative international headlines), and so whichever ministry he helped is probably still looking out for him. But it is an embarrassment to have these so-called businesses running that basically screw the foreign workforce that works in them.

The negative feeling back in home countries can build up just like, well, radioactive particles on a spinach field.

Time for Japan to clean the industry up.

Whatever Inayoshi is doing, I am surprised that the new government has been riding him harder.

Meant to say "new government has NOT been riding him harder."

Whatever Inayoshi is doing, I am surprised that the new government has been riding him harder.

Meant to say "new government has NOT been riding him harder."

I suspect the Nova fiasco is a big embarassment that politicians and bureaucrats would all rather just forget about. Much easier to pretend it's all been happily sorted. The DPJ needn't add it to their list of hassles at all, they can pretend it was all sorted before they came to power and is therefore nothing to do with them. It'll be interesting to see how they respond to what Inayoshi does next.

I doubt they are remotely interested.

They could not give a rat's ass. Many say they used to, on the sly (money under the table for the blind eye kind of stuff), but that was before they distanced themselves, and put METI on to old school NOVA, as Japanese (not gaijin) complaints, began to escalate.

It's said that Saruhashi did try to manipulate dirty politicians in his final days, but got the "It's over old friend - we will try to to minimise charges and sentence severity, but that is all we can do" speech, in reply to his veiled black mail threats.

Many say they used to, on the sly (money under the table for the blind eye kind of stuff), but that was before they distanced themselves, and put METI on to old school NOVA, as Japanese (not gaijin) complaints, began to escalate.

Well, no one in the LDP or METI wanted any angry customers noticing how friendly they'd been with one of Japan's most notorious scam-artists and all-round pricks, and, even worse, blaming them for letting him rip them off.

Thus far the DPJ haven't had to give a rat's ass because Inayoshi and pals haven't racked up lawsuits and complaints the same way the old Nova did (although they did cheat on their taxes). But we'll see.

New Nova is a fraction of the size of old Nova in terms of student numbers. It also has nothing like the same public profile, with very little advertising being done by comparison. If Inayoshi gets dealt to at all, which is unlikely, it will not be a major public matter involving high level politicians.

Sahashi (Sarushashi), Nova, et al/NOVA: WHERE ARE THEY NOW?

Those names are and deserve to be in the hall of infamy of Nova. Some of them are still in Japan. Lundquist may be working at a school in the Kobe area, and Simpson has been sighted in Kyoto from time to time. Farley is running an outfit called Global, which is big now in outsourcing "ALTS," & playing footsie with local school boards etc

Heard Fackler was in the US, possibly with a name change, playing with other ultra right wing fellow travelers.

I really don’t want to get back into any Nova Corporation debate.

You can save that for NTU.

I am sure Coburg and his lap dancing poodle, Mackorello, will engage you, until your heart is content.

“Build It, and They Will Come”

“Post in NTU, and Coburg and His Lap Dancing Poodle, Mackorello, will come”

Try it.

You won’t be disappointed.

Still obsessed with Coburg and Mackorello. You really are a sad, sad case...

If a thief robs a thief who do they turn to? The only ones getting anything out of this will be the yakuza!

Ex-GEOS students have been getting 75% discounts on lessons at Nova until all the money they paid has been used up, like old Nova students. They're now getting told they'll only be eligible for 50% discounts. The old Nova students will be able to continue getting 75% discounts for some reason.

Hideo Sugimoto, the G.com CEO who took over when Inayoshi had to quit over his tax-dodging, and who oversaw the takeover of GEOS, seems to have been replaced by someone called Yukinari Hamano. Wonder if that's anything to do with losing all those shares?

Nova spent years conning and screwing people and Gcomm did the same. Nice to see karma in action.

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