TOKYO (TR) – Last week, the president of AIJ Investment Advisors, Kazuhiko Asakawa, admitted before the House of Representatives finance committee that his investment company fabricated investment gains in an attempt to cover heavy losses.
The issue first surfaced in late February, when Japan’s Financial Services agency froze AIJ’s assets to halt its operations. One of the company’s 84 clients includes the Nagano Prefecture Construction Industry Welfare Pension Fund, which had entrusted the investment firm with more than 30 percent of its pension assets, or approximately 6.5 billion yen.
“I had no intention of inflating the figures,” the president said during the hearing, “but I didn’t want to return the entrusted money to our clients at a loss.”
No criminal charges have yet been filed against AIJ or Asakawa. That, however, is not the case for Yoshinobu Sakamoto, a former manager at the same Nagano pension fund, whose alleged wrongdoing has resulted in the issuing of a warrant for his arrest.
The 54-year-old employee has been wanted by the Nagano prefectural police for more than one year in connection with the embezzlement of 2.38 billion yen from that fund.
The Sankei Shimbun (June 29, 2011) reports that in early September 2010 Sakamoto told a colleague that he was going to Tokyo. He subsequently fled the country and has not been seen since.
According to the Asahi Shimbun (Sept. 14, 2010), Sakamoto was first given control of the Nagano pension fund assets in 1989. Prior to his disappearance, he was in charge of overseeing more than 20 billion yen in funds entrusted by 6,800 people.
At a press conference on September 12, lawyer Zensuke Tanaka, who is investigating the matter, said that it was mistake to allow one person to manage such a large amount of money.
Chikara Sasaki, the Nagano pension fund’s board chairman, said that Sakamoto told him that since 2006 he had been returning premiums from the Iida branch office so that the funds could be managed by that office locally since returns had been unsatisfactory — the practice for which is a violation of the Employees’ Pension Insurance Act.
However, the Iida branch in fact never received the returned premiums. “The manager appears to have concocted a fake story,” said Sasaki, as quoted by the Asahi.
A report filed by Fuji News Network (Sept. 6, 2011) interviews Sakamoto’s neighbors, whose identities are obscured. One woman said that Sakamoto owned a number of flashy automobiles, including a high-end silver Lexus; another marveled at the supposed 20 million to 30 million yen he had spent on agricultural equipment.
Mother knows nothing
Sakamoto’s mother told the network that she knows nothing about the alleged embezzlement. His wife said she has not spoken to her husband.
The Fuji segment says that Sakamoto arrived in Bangkok, Thailand on September 10, 2010. With no subsequent record of a departure from the country, the program believes he has overstayed his entry visa, which was due to expire in March 2011.
During Sakamoto’s time on the run, the Nagano District Court has ruled against him on two occasions: On Sept. 6, 2011, he was found liable for 20 billion yen in reparations to the Nagano pension fund, and seven months before that a similar ruling for 55.3 million yen was handed down.
The Nagano pension fund has thus far been able to seize 50 million yen from Sakamoto’s life insurance plan and other assets.
“We didn’t realize that we were putting too much trust in him,” said chairman Sasaki of Sakamoto.
Clients of AIJ likely share similar sentiments.