Prosecutors are investigating an executive at UBC Corp., a Tokyo data-processing company linked to the nation's largest labor union, who made huge personal gains by selling shares in a client company, sources said Thursday.
News of the probe followed the arrests Wednesday of three others linked to UBC who are suspected of embezzlement.
The UBC executive in question, who has not been named, made about 1 billion yen off transactions involving an information-technology company, the sources said. UBC is affiliated with the All Japan Prefectural and Municipal Workers Union (Jichiro).
The official received the shares when the IT company was privately held, but sold them for profit when the company went public during the IT bubble, which started around 1999, the sources said.
He resigned from UBC in June last year after he was accused of receiving the shares from another UBC client in return for business from UBC, although he denied the allegations, the sources said.
In a raid Wednesday on UBC, prosecutors arrested Yoko Hasegawa, 59, senior managing director for UBC; Hideyo Saito, 49, counselor for business promotion; and business consultant Shunji Nakayoshi, 56; for allegedly embezzling UBC funds to cover up losses from private share transactions and paying gangsters for help in covering up the alleged embezzlement.
UBC, established in 1983 in Tokyo, is controlled by Jichiro and processes its data.
Many top UBC executives are key members of Jichiro. Hasegawa, for instance, held the title of special executive member. The union dismissed Hasegawa from both the UBC and Jichiro posts after the arrests.