Police on Wednesday arrested Hiroyuki Kuroiwa, former president of a failed health food company, and two others on suspicion of illegally collecting funds as investments in rights to use a mineral spring.
Kuroiwa, 65, and the other two suspects have admitted to violating the investment law, according to the Tokyo Metropolitan Police Department and the Kagoshima Prefectural Police.
The company, Kenko Igakusha, is suspected of collecting a total of ¥8 billion from around 650 people nationwide since 1998. The police will investigate flows of funds and other aspects of its operations.
The three allegedly collected some ¥228 million in total from nine investors, including a 72-year-old man in Chiba Prefecture, between April 18, 2003, and Aug. 24, 2010, on the pretext that the money would buy rights to use a mineral spring, in violation of the law.
Established in 1967, the Tokyo-based firm has sold health food products, such as black vinegar, according to a group of lawyers for the victims.
The firm started around 1998 to sell rights to a mineral spring on its corporate premises in Kirishima, Kagoshima Prefecture, for ¥1 million per lot, promising to pay an annual interest of 4 to 5 percent.