About 300 million yen contributed by employees of the bankrupt language school chain Nova Corp. to a staff welfare fund was transferred to a company bank account in July to cover operating costs and done without the approval of employees, the police have said.
According to the police, former Nova president Nozomu Sahashi ordered the transfer of the entire balance of the fund to a Nova business account to allow the payment of refunds to students who had canceled contracts with the financially troubled firm.
The police are investigating the case as possible embezzlement in the course of business by Sahashi, who owned the affiliate firm that handled the money transfer.
According to sources close to Nova and the investigation, Nova employees made monthly contributions from their pay to fund a mutual aid organization that covered the costs of business trips and occasions of congratulations or condolence.
Held in a bank account, the fund was managed by an employee in Nova’s accounting division. The fund was rarely used and had an accumulated a balance of 300 million yen.
Last June, Nova was ordered by the central government to partially suspend its operations due to illegal business acts, including giving misleading sales pitches and making exaggerated claims in advertisements.