SAITAMA – Police on Monday arrested seven executives of Zen-Noh Chicken Foods Corp. and a Kagoshima chicken-processing firm for allegedly conspiring to mislabel imported chicken as higher priced domestic meat as part of a fraud scam.
Police in Saitama and Kagoshima prefectures made the arrests after questioning the executives earlier in the day in connection with suspected violations of a law covering unfair competition.
According to police, Zen-Noh Chicken Foods conspired with Kagoshima Kumiai Chicken Foods in November to label chicken imported mainly from Thailand and China as domestic meat.
The seven have owned up to the fraud, according to police.
Among those arrested were 51-year-old Akio Takeda, who was head of Zen-Noh Chicken Foods’ Tokyo-area branch and a board member of the firm at the time of the suspected fraud, and 52-year-old Kiyokazu Kusumoto, who was executive director of Kagoshima Kumiai Chicken Foods.
Also arrested were 49-year-old Kimio Kondo, who headed the planning and control department at Zen-Noh Chicken Foods’ Tokyo-area branch; Koichi Takata, 46, head of sales at the branch; Yuzo Kano, 41, a sales division chief at the branch; along with Kagoshima Kumiai workers Kimihiro Chuman, 44, and Toshiyuki Beppu, 50.
All seven had been assigned to different posts after the scandal broke, police said.
Police also plan to turn over to prosecutors their case against the two companies, alleging a systematic fraud.
Zen-Noh Chicken Foods, based in Toda, Saitama Prefecture, is affiliated with the National Federation of Agricultural Cooperative Associations (Zen-Noh).
The fraudulent labeling scam was carried out mainly at the Kagoshima firm’s chicken-processing plant in Sendai, Kagoshima Prefecture, in November and December, police sources said earlier.
Zen-Noh Chicken Foods is also suspected of making false claims about its method of raising chickens at Zen-Noh farms.
Police raided Zen-Noh Chicken Foods’ premises and about 30 other locations on April 22 after the firm acknowledged the false-labeling episode.
The company said it sold 11,400 packs, amounting to 4.5 tons, of mislabeled chicken to Co-op Net, a Zen-Noh-affiliated cooperative based in the city of Saitama.
Co-op Net has started to refund 1.4 billion yen to members who bought the falsely labeled chicken and is demanding that Zen-Noh compensate it for damages.
In April, the Fair Trade Commission issued an administrative order against Zen-Noh Chicken Foods and Kagoshima Kumiai Chicken Foods over the false labeling.
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