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.
The company set up the special fund for congratulatory or condolence payments for employees by collecting about ¥2,000 a month from the pay of each employee, according to other sources.
The special fund was managed separately from the company’s accounting, they said.
The company reportedly paid out a total of ¥530 million to reimburse students, according to the sources.
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.