TOKYO (TR) – Another major corporate scandal hits Japan after Daio Paper said Tokyo District Public Prosecutors are expected to launch an investigation into the transfer of $140 million in company funds to the personal bank accounts of its former chairman Mototaka Ikawa, Nikkei news service reported.
Prosecutors questioned Ikawa, 47, over the weekend after the tissue maker filed a criminal complaint against the grandson of the company’s founder for breach of trust, Nikkei said, citing local media reports. The public prosecutor’s office did not make itself available for comment after the meeting, the news service reported.
The 58-year-old company disclosed in October an internal investigation found accounting irregularities dating back to May 2010. The investigation said Ikawa borrowed the funds from as many as seven different Daio Paper subsidiaries.
In a statement to shareholders, Daio apologized for the incident, Nikkei said. Ikawa resigned his post in September while his father was fired from his advisory role and his brother was forced to step down from the company’s board of directors.
Camera and medical device maker Olympus is currently embroiled in a massive scandal. The 92-year-old company publically admitted to hiding investment losses that date back decades.
Daio was put on a watch list for possible delisting by the Tokyo Stock Exchange after it failed to file its quarterly statements in time. It has until Dec. 14 to file to avoid delisting, according to Nikkei.
Public broadcaster NHK reported Ikawa may have gambled away most of the funds at overseas casinos.
Source: Nikkei and NHK