TOKYO (TR) – Nearly half of the shares from an alleged fake capital increase by bankrupt construction company Inoue Kogyo may have gone to associates of a yakuza crime syndicate, the Mainichi Daily News reported, citing law enforcement sources.
Inoue Kogyo issued 150 million shares worth 1.8 billion yen in September 2008 and then is believed to have sold them to a financial broker. The troubled construction firm may have footed three fourths of that amount in an attempt to maintain its share price, according to the Mainichi.
A group associated with the Yamaguchi-gumi, Japan’s largest organized crime group, is alleged to have then lent the remaining 300 million yen to the financial broker’s organization in return for 125 million shares as collateral, which they then refused to return after the broker repaid the debt, according to the paper. A former gangster associated with the Yamaguchi-gumi purportedly negotiated the return of 100 million shares but kept 50 million as a commission.
Inoue Kogyo’s stock price fell from 15 yen per share to 5 yen in the nine days after the company issued the additional stock. The Mainichi cited investigative sources as saying they suspect the price plunge occurred after the gang-associated group and others sold off the massive number of shares they still held.
Police arrested Inoue Kogyo President Tsuyoshi Nakamura, 68, and four others over the case. Nakamura and a board member of the gang-affiliated firm deny any wrongdoing, while the three others have admitted to the allegations, the Mainichi said, citing law enforcement authorities.
Source: Mainichi Daily News