A 58-year-old company president arrested Saturday for possessing thousands of packs of counterfeit cigarettes in apparent violation of the Trademark Law is also suspected of marketing the tobacco in violation of the Tobacco Business Law, police sources said Sunday.

Fumio Sasai, president of Yazaki Sangyo, was arrested after police found 189 cardboard boxes containing nearly 100,000 packs of phony Mild Seven Lights and Seven Stars, well-known brands sold by Japan Tobacco Inc., the government’s effective monopoly, at JT’s office in Tokyo’s Shinjuku Ward.

Sasai was arrested on suspicion of “possessing products resembling registered trademarks for the purpose of selling,” according to the arrest warrant served on him.

Police may serve another warrant on suspicion that Sasai sold cigarettes without government approval, the police sources said.

The Tobacco Business Law allows only JT to produce cigarettes in Japan. Some 20 other companies are allowed to market foreign tobacco brands.

Yazaki Sangyo is registered as a company running various businesses involved in real estate and waste disposal, and is not a licensed tobacco wholesaler or retailer.

Sasai has admitted he sold more than 100,000 packs of fake cigarettes in Tokyo, Gunma and Saitama prefectures, they said.

JT announced Thursday that it had found at least 53,133 elaborately forged cigarette packs made to resemble Seven Stars and Mild Seven Lights in Tokyo, Fukushima, Gunma, Ibaraki and Saitama prefectures since early May.

Police in Okinawa said Friday they had found 30,000 fake packs of Mild Seven Lights, which an Okinawa company allegedly purchased in Tokyo.

The packs were nearly identical to the genuine articles, except for hard-to-spot mistakes, such as a missing line in the bar code and a misprinted Chinese character.

JT officials earlier said the high-quality fakes might have been made overseas.

Seven Stars and Mild Seven Lights are among JT’s best-selling products, and retail for 250 yen per pack. JT, which continues to monopolize tobacco production in Japan even after its privatization in 1985, has some 120 cigarette brands.

JT’s predecessor, Japan Tobacco & Salt Public Corp., established in 1949, previously enjoyed a domestic monopoly on tobacco and salt. The government abolished its monopoly on tobacco in 1985.