OSAKA – Several former Duskin Co. executives, including former Chairman Koji Chiba, are suspected of using 180 million yen of the firm’s money to help out a cash-strapped friend of Chiba’s, sources said Tuesday.
The Tokyo District Public Prosecutor’s Office is reportedly investigating the executives on suspicion of aggravated breach of trust.
They allegedly furnished Chiba’s friend with money in the two years to March 2001, thereby causing the company to lose assets, the sources said.
Chiba, 63, who at the time was president of Duskin, which leases out cleaning equipment, ordered the company to pay an Osaka design firm known as Spice to design free items handed out by the Mister Donut chain, a Duskin affiliate, the sources said.
The president of Spice had asked Chiba for help, as the firm was in financial trouble, the sources said.
Chiba failed to consult the board of directors before coming to his friend’s aid, ordering a senior managing director to help the design company, the Asahi Shimbun reported Tuesday.
Spice did not carry out the commissioned design project, instead using the money to pay off debts.
Duskin cannot retrieve the money because Spice was liquidated in March.
Chiba became chairman of Duskin in 2000 while remaining president.
He resigned from both posts in June 2001.
Last year, the Osaka Regional Taxation Bureau determined that some of the money paid to Spice was actually an attempt by Duskin to shift 180 million yen in income and evade taxes.
Duskin was forced to pay 100 million yen in back taxes.
Its head office in Osaka was swamped by reporters Tuesday. Asked about the tax evasion, company spokesman Toru Yamamoto stressed that the case was closed when the firm paid back the taxes.
“The incident was caused by some of our former execs, who are gone now,” Yamamoto said, adding that Duskin has had no contact with Chiba or knowledge about where he is.
Meanwhile, current Duskin President Hideyuki Ito released a statement saying, “It is true that the Tokyo District Public Prosecutor’s Office has asked the company to cooperate with the probe.” But Ito declined comment on specifics.
According to company sources, Duskin may sue Chiba.