OSAKA — Police searched a Nippon Meat Packers Inc. office Tuesday in Nishinomiya, Hyogo Prefecture, on the second day of their hunt for evidence in connection with the beef mislabeling scam carried out by the firm’s subsidiary.
They want to find evidence linking Nippon Ham, as the company is better known, with its subsidiary’s disguising of foreign beef as domestic to fraudulently obtain government subsidies, police sources said.
Investigators are also trying to determine whether Nippon Ham officials were involved in efforts to cover up the fraud, the sources said.
According to police, the heads of three sales offices of the subsidiary, Nippon Food Inc., had their staff falsely label the beef to take advantage of a government buyback program intended to help the meat industry weather the fall in sales following the outbreak of mad cow disease in domestic cattle last fall.
The three sales chiefs, who have been fired, are suspected of defrauding the government of more than 10 million yen.
In applying for the buyback program, the sales offices did not contact the subsidiary’s head office but dealt directly with the meat division of the parent company, according to police.
The three former employees, whose names were not provided, have claimed that they acted independently, denying direct involvement in the fraud by Nippon Ham’s head office.
Police, however, are investigating whether Nippon Ham received reports of the false labeling and gave its approval during the process.
Upon learning of the scam, former Nippon Ham Senior Managing Director Motoaki Shoji allegedly tried to cover it up by asking for the return of falsely labeled beef sold to an industry association in the buyback program, saying its use-by date had expired.
The returned beef was disposed of in July. Shoji, who was stripped of his post after the scandal broke Aug. 6, claimed he had no intention of covering up a crime.
But on Aug. 9, then Nippon Ham President Hiroji Okoso admitted to reporters there was no way to avoid appearing to be a party to a coverup. He has since been demoted to senior managing director.
Shoji has admitted, as has Okoso, he knew of the false labeling by the three Nippon Food sales offices from February to May and he immediately contacted the industry association to terminate the contract, giving as a reason that the meat’s expiration date had been reached.
The association dissolved the contract on July 12 and instructed Nippon Ham in a written document to dispose of the meat immediately, Okoso and Shoji claimed. The meat was disposed of July 18 and 19, they said.
Nippon Ham’s claims, however, contradicted in part the Agriculture, Forestry and Fisheries Ministry’s investigative report issued Aug. 14.
According to the ministry, the association told Nippon Ham over the phone to dispose of the meat. But July 23, the farm ministry instructed the association to reinstate the contract, which it did July 26. Nippon Ham then disposed of the meat on its own, according to the report.
A senior official of the industry association said the association did not know of the false labeling. He claimed the association did ask for the disposal of the meat, but did not in writing because it could not demand the disposal of Nippon Ham’s property.