Police have obtained a warrant to arrest Hiroo Mizushima, 89, the former chairman of failed department store operator Sogo Co., on suspicion of hiding personal assets from creditors, police sources said Friday.
Investigators sent to a Tokyo hospital where Mizushima is being treated for angina concluded after consulting with doctors that he could endure detention. Mizushima has been hospitalized since early Wednesday.
According to the sources, he withdrew 150 million yen in bank deposits and investments immediately after Sogo went bankrupt in July, placing 100 million yen of that in cash in the custody of a relative from the beginning of this year to early May.
He allegedly brought home some of the money kept at the relative’s house earlier this month and used some of it for legal expenses. The remaining money was seized when police raided his home Wednesday, the sources said.
Investigators believe these actions indicate that Mizushima was attempting to hide assets, the sources said.
But Mizushima’s lawyers said Friday that by withdrawing the money and selling real estate to his brother-in-law, Mizushima did not obstruct the execution of court orders. They said precedents indicate that only concealment of funds constitutes a crime and Mizushima should not be held criminally responsible for using the withdrawn money to cover his living and legal expenses.
Investigators had initially planned to proceed with the probe without detaining Mizushima, but then feared he might try to conceal or destroy evidence.
The former chairman’s whereabouts could not be confirmed for a few days prior to his hospitalization, giving rise to their concerns, according to the sources.
Mizushima allegedly withdrew the money before Sogo’s main creditor, the Industrial Bank of Japan, moved to seize his assets to cover a personal guarantee he made on an 11 billion yen loan to Sogo for its store in Sumida Ward. The bank sought an order for the seizure from the Tokyo District Court in late July.
Mizushima presided over Sogo for 38 years as president and later chairman of the board before stepping down in April 2000 at the height of Sogo’s crisis.
Sogo is currently undergoing reconstruction under Seibu Department Stores Ltd.
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