• Kyodo

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Police on Tuesday arrested the president of Fukuoka-based meat processor Nippon Shokuhin Co. in connection with a fraud case last year involving the false labeling of beef.

Shigehito Atoyama, 51, was allegedly involved in the mislabeling and in concealing the fraud from government inspectors, according to the Fukuoka Prefectural Police. Nippon Shokuhin is currently undergoing rehabilitation.

Atoyama has admitted to the allegations, they said.

The police allege that Atoyama conspired with Takeshi To, 70, former auditor of Nippon Shokuhin, and Yasunori Yoshida, 55, former sales manager at the firm, to swindle a government-commissioned industry body out of about 136 million yen in subsidies last December by falsely labeling some 122 tons of imported beef as domestic in November 2001.

The subsidies were paid out under a buyback program instituted to help the beef industry after an outbreak of mad cow disease seriously reduced consumer demand for domestic beef.

Imported beef, untainted by the disease, was not covered in the subsidy program.

To and Yoshida were arrested Nov. 10 on the same charges.

The trio are also suspected of being involved in concealing the false labeling when inspectors from an affiliate of the Agriculture, Forestry and Fisheries Ministry began a probe into the firm’s management in January, the police said.

Although Atoyama admitted the coverup when the mislabeling scandal was revealed in June, he denied being involved in the case.

Once a major meat and processed food manufacturer in the Kyushu region, Nippon Shokuhin suffered severe damage to its business when supermarkets pulled its products from their shelves after news of the scandal broke.

On July 3, the company filed for court protection from creditors, carrying liabilities of about 22.03 billion yen. The Fukuoka District Court approved a rehabilitation plan for the company that began Aug. 23.

This is the second case in which company executives were arrested in relation to mislabeled beef. In April, Snow Brand Foods Co., a subsidiary of Snow Brand Milk Products Co., disbanded after sales plummeted following news of its involvement in a similar scandal.

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