Thousands of foreign teachers have been made jobless and face expulsion from Japan after the country’s biggest chain of English language schools folded and sought protection from creditors.
Nova Corp said on Friday that it has filed for court protection from creditors amid efforts to turn its business around after being punished by authorities for misleading students.
Nova has some 7,000 employees, of whom about 4,000 are foreigners, Japanese media estimated. Many have not been paid for months as the company struggled to keep afloat.
The British and Australian embassies in Tokyo are offering advice to its nationals left jobless.
About 300,000 students, many of whom who have prepaid for lessons, are also affected by the school shutdown.
“It’s a quite a large problem,” said an official at Australia’s Department of Foreign Affairs and Trade in Canberra. The Australian government estimates about 900 Australians are employed at Nova.
The Australian government has asked national carrier Qantas to offer reduced airfare for a limited period to Australian Nova employees wishing to go home.
The British Embassy also said on its web site on Saturday that it was “aware of recent concerns regarding payment of wages to Nova employees,” and said they are “closely monitoring the situation.”
It urged the employees to contact regional Nova offices and workers’ union representing the company’s workers.
Many teachers, unaware that the company had decided to file for court protection, turned up at work on Friday only to find the schools closed.
“Teachers are always the last ones to be told,” the Japan Times newspaper quoted 32-year old Genevieve Latimer, an Australian, as saying. “I haven’t even received my September paycheck.”
Many teachers are also left worried about their visa status.
Nova, which operates over 900 schools in Japan, posted net losses for the past two business years and said it held a total 43.9 billion yen in debt as of July.
Nova said a rapid expansion has lowered its profitability and a government penalty to curb taking on new students has hit revenues.
In June, the trade ministry punished Nova for misleading prospective students about its services. The company was forbidden for six months from signing up students for contracts that were on year or longer, or more than 70 hours of lessons.
Two lawyers, appointed by the court to oversee Nova’s assets and other affairs, told a news conference on Friday they would try to find a sponsor to help rebuild the company, but would dissolve the firm if they could not do so within a month.
Japanese internet firm Rakuten Inc has shown an interest in helping Nova, a Japanese daily Asahi Shimbun reported on Saturday.
The lawyers said they would contact Aeon Co Ltd, Japan’s second-largest retail group, and other companies on the possibility of becoming a sponsor, the paper said.