English School NOVA ordered to suspend part of its business: The beginning of the end

Some Background:

NOVA is the largest player in the English-teaching business in Japan, the largest market for that industry in the world. A sizable percentage of Japan's English teachers and English-speaking foreigners had their first job in Japan with NOVA.

Some say it's not so bad; some curse it, but all know it.

Two years ago, NOVA got in trouble for failing in its obligation to sign its foreign employees up for national health insurance and unemployment insurance. The company has been in trouble before for not complying with various labor laws and consumer-protection laws.

Those familiar with business in Japan will know that punishments for white collar crimes are notoriously weak and that injunctions from government ministries have been notoriously toothless.

Things are changing.

Yes, that headline is true. No, they're not yet telling us the full story behind which part of the business NOVA will have to suspend (For further details that have come to light since this was written, please see below -Ed.). Here's what we do know: After having threatened to do so earlier this week, the Ministry of Economy, Trade and Industry is set to order NOVA to shut down part of its business for six months in retaliation for lying to their students when making sales pitches and violating industry laws.

As I said, we don't know the exact details of how this will affect the English conversation school market leader's ability to conduct sales, and METI has most likely kept this intentionally vague. I tend to think that it doesn't matter which operational capabilities NOVA is forced to go without for six months, they're finished either way. They might be able to scrape by without a janitorial crew, but I don't think that's what METI is after.