About 750,000 Japanese paid for evening and weekend language lessons last year, nearly two-thirds of them through Nova.
Teaching English in Japan, a popular first job for western university graduates, has become dicier proposition. Nova, the dominant force in Japan’s $1.2bn-a-year private language-teaching business, has filed for court protection from creditors after scandals and lawsuits drove away tens of thousands of students.
The company, which is Y44bn (?266m) in debt, had closed dozens of its 900 schools and missed salary payments to some 4,000 instructors from the UK, the US, Canada and Australia.
Critics blame an aggressive expansion campaign by Nozomu Sahashi, founder and chief executive, for overstretching Nova’s resources. Mr Sahashi was fired by the board of the publicly listed company.
About 750,000 Japanese paid for evening and weekend language lessons last year, nearly two-thirds of them through Nova. Mr Sahashi founded the company in 1981 after returning from studying in Paris. The chain’s bright blue signs are ubiquitous around urban train stations, which sometimes sport a Nova outlet at more than one exit.
Nova has reported a net loss in each of the past two years and has been struggling under a government ban. The recruiting of new students by Nova was prohibited in response to claims that it had failed to disclose a chronic shortage of lesson spaces. Courts have also ordered Nova to refund millions of yen in pre-paid fees that the company claimed had been forfeited by dropouts.
A court-appointed receiver will assess the company’s assets and seek financial sponsors to help turn the company round. Failing that, the chain could be sold or liquidated.
Paul Dorey, an official at a union that represents some Nova instructors, said: “It’s been a vicious circle for a while. They couldn’t find enough teachers, so students couldn’t book lessons at peak times and would quit.”
He said foreign staff risked losing company-sponsored housing after Nova stopped paying their rent. “Some teachers have already received eviction notices. It’s a total mess.”
Nova and other English schools fill a gap left by Japan’s education system, which does a notoriously poor job of training students to speak the language.
Only nine of 147 countries ranked lower than Japan last year in average scores on the widely used English language proficiency test run by the Educational Testing Service of the US.