The Walls Close in on Sahashi

The Yomiuri reported earlier this month about allegations of Sahashi using an employee's fund for his own purposes. It looks like the police have enough evidence to launch a criminal investigation into the embezzlement of those funds. Here's the story from the Asahi Shimbun:

Update 6/23 Edited since the Asahi has posted their translation of the story.

Ex-Nova boss in hot water over suspected fund mischief

Police suspect that the former president of Nova Corp., the now-bankrupt chain of language schools, embezzled employee union funds to pay off students who canceled contracts with the beleaguered company, sources said.

Police believe Nozomu Sahashi, 56, illegally yanked 300 million yen from the company's mutual assistance union in July last year right after the industry ministry partially suspended Nova's operations for shady business practices.

About 2,400 Japanese employees were required to contribute to the fund.

Sahashi apparently used the money to repay many students who canceled contracts with Nova and to take care of other pressing debts, according to the Osaka Prefectural Police Department.

Investigators plan to interrogate Sahashi and raid former Nova facilities this week at the earliest.

Comment: Of all the things the things Sahashi may be guilty of, it may seem odd that the police are pursuing this seemingly lesser charge. My guess is that this is a charge that will stick since there appears to be no shortage of evidence and disgruntled employees to help the police connect the dots. When they investigate and arrest Sahashi, police interrogations will no doubt yield further charges.

More from The Japan Times:

The Osaka Prefectural Police will soon open a criminal investigation against the former president of failed language-school chain Nova Corp. on suspicion of embezzling a ¥320 million special employee welfare fund, sources said Sunday.

Nozomu Sahashi is suspected of ordering the accounting staff at the Osaka-based firm to transfer all of the money in the fund to a company account on July 20, 2007.

He allegedly used the money to refund students who canceled lessons after the school was ordered by the government the previous month to suspend part of its business over exaggerated advertisements, the sources said.

[...]

A former Nova board member said he believes a substantial amount in the special fund had long been used as company operating money.

"Even the board members did not know where the money actually went. Part of it may have been used as a slush fund for the president," he said.

An agent for Sahashi said the former president did not realize the money had come from company employees and used all of it for the refunds. The agent denied Sahashi used the money for his own personal expenses.