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Scandal-tainted nursing-care service Comsn Inc. signed an agreement Thursday with affiliate NSS Corp. to hand over its business and all of its employees, but the health ministry quickly objected and urged the firms to suspend the deal until the end of the business year in March.

The warning came a day after the ministry decided to shut down 80 percent of Comsn’s operations over the next five years by refusing to renew licenses for 1,655 of its nursing homes due to evidence of fraud.

Both companies are subsidiaries of Goodwill Group Inc., a major staffing agency.

On Thursday evening, the Health, Labor and Welfare Ministry told Comsn it would “be difficult” for the companies to allay public unrest over the deal. Since NSS and Comsn belong to the same corporate group, the cozy agreement has raised concerns that Goodwill is trying to sweep Comsn’s problems under the rug and prevent any attempt to hold the company accountable.

The shutdowns will affect about 60,000 elderly.

The ministry also urged Comsn to continue nursing services for its clients through the end of the business year. By next April, the parties involved should then fully consult the ministry and discuss the future of their businesses, the ministry said. Comsn late Thursday accepted the ministry’s demand.

On Wednesday, Comsn said the deal is designed to secure continued nursing-care services for its customers and to ensure the job security of its employees. The business will belong to NSS Corp. as of July 31, the firm said.

The ministry said the operating licenses of the nursing-care centers were being terminated because Comsn obtained some of them through fraudulent applications, including those that inflated employee figures. The decision threatens to displace about 60,000 customers and 24,000 employees.

The ministry Wednesday told all prefectures that have issued licenses to Comsn not to renew the six-year permits for 1,655 Comsn care centers when they expire between next April and March 2012, and not to issue any new ones to the firm, ministry officials said.

The deal would have allowed NSS to seek licenses to run the ex-Comsn facilities.

Wakayama Gov. Yoshinobu Nisaka said his prefecture will not grant licenses to NSS.

“(Comsn’s move) is an evasion of the law,” he said. “Even if the company that offers services changes (to a different company), the substance is the same.”

Comsn inflated the number of caretakers under its employ to obtain a license last July for a care center in Hirosaki, Aomori Prefecture, the officials said, citing one fraudulent case.

The ministry has said Comsn’s move to abolish a care center in Tokyo at a time when the metropolitan government was about to revoke its license was a deliberate attempt to escape punishment.

Based on these fraudulent acts, the ministry applied the guilt-by-association clause to Comsn’s eight operations in five prefectures in refusing to renew their licenses.

For related stories:
Comsn nursing centers to lose licenses 1,600 sites face closure over certification fraud

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