AIJ Investment Advisors Co. President Kazuhiko Asakawa repeated Friday in the Diet that he had no intention of deceiving his clients but admitted he showed them falsified fund performance reports.
Asakawa spoke in front of the Lower House Financial Affairs Committee, which summoned him to testify as a sworn witness. He basically repeated his unsworn testimony to the same committee earlier this month.
AIJ Investment, which has been managing pension money since 2003, was taking massive losses on derivatives trading but issued regular reports to the financial authorities and generated pamphlets showing clients that its fund performance was much better than it really was. It paid off clients who wanted to cash out by collecting money from new clients.
“I recognized that I was showing clients false fund performance,” Asakawa told the committee. However, “I didn’t intend to defraud clients.”
Asked when the falsification started, he said: “Since AIJ began managing pension money. Looking back, I should have reported losses at much earlier stages. Now, all I can say is I tried really hard” to make up for the losses.
Asakawa said during both committee sessions that AIJ used false investment return records to persuade pension funds to invest with the firm while he was in fact taking heavy losses.
The Securities and Exchange Surveillance Commission, after inspecting the troubled asset manager, raided AIJ’s head office and other locations on March 23 to investigate how it came to lose so much pension money after fraudulently claiming high returns.
The SESC said AIJ had ¥145.8 billion in pension fund assets under management but lost ¥109.2 billion, leaving it with only ¥8.1 billion in cash and deposits.
Asakawa denied responsibility for ITM Securities Co., its sales agent, saying he never told it that the fund performance reports were false.