Tsumura pleads not guilty to breach of trust

Akira Tsumura, former president of leading Chinese medicine maker Tsumura & Co., and two colleagues on April 9 pleaded not guilty to aggravated breach of trust allegations related to loan improprieties.

Tsumura, 61, as well as Heikichi Ito, 49, former executive director of Tsumura Shoji, then a wholly owned subsidiary of the Chinese medicine maker, and Hirotsugu Shibata, 57, former president of Tsumura Shoji, pleaded not guilty at the first hearing of their trial at the Tokyo District Court. Tsumura was arrested last October and indicted in November on charges that he inflicted financial damage upon Tsumura & Co. by giving loan guarantees to Tsumura Shoji without the authorization of the company’s executive board.

It is believed that the subsidiary did not have the ability to repay the loan. Tsumura Shoji is no longer a subsidiary of the Chinese medicine firm. Tsumura is suspected of conspiring with Ito, who is also president of the real estate company Seiso, and Shibata in arranging the loan guarantees.

During the hearing, Tsumura admitted that he gave the loan guarantees without the board’s authorization. But he said there was no conspiracy with Ito or Shibata and that he had no intention of promoting his own interests through the loan guarantees. “It was a loan for Tsumura & Co. and Tsumura Shoji. I made an irrecoverable mistake as a person who is running a business. I am deeply searching my soul,” he said.

He added that he had not recognized that Tsumura Shoji was unable to repay the loan. Ito and Shibata also asserted in the hearing that the debt guarantees were provided lawfully.