Police on Monday arrested Keiichi Kamada, the president of consumer electronics retailer Wakodenki Co. who recently filed for court protection along with the firm, on suspicion of committing fraud during bankruptcy proceedings.
Investigators said it is the first time that the fraud charge has been applied to an an individual in a rehabilitation case.
Several locations, including Wakodenki's headquarters in Osaka's Tennoji Ward, were searched in connection with the case.
Kamada, 55, allegedly hid some assets when he submitted a list of personal property to the Osaka District Court on April 28 as part of his application for protection from creditors under the Civil Rehabilitation Law, they said.
The firm had failed with around 30 billion yen in liabilities.
Yuji Miyazaki, the firm's administrator, told a news conference earlier Monday that Kamada withdrew stock certificates for several issues -- including 10,000 shares of Sharp Corp. and some 5 million yen in cash from two securities firms -- in mid-April before Kamada filed for rehabilitation.
Miyazaki said Kamada also withdrew some 17 million yen from a bank account in early June. Kamada has hidden at least 50 million yen worth of assets, he said.
"I felt this was totally unacceptable, and filed a criminal complaint" with prefectural police, he said.
Miyazaki was appointed administrator by the district court after Kamada met with police for voluntary questioning before his arrest.
The lawyer who handled the rehabilitation proceedings claimed that all of Kamada's assets were listed in the documents presented to the court.
Wakodenki operates 72 outlets in Osaka and neighboring areas and in Shikoku's Tokushima Prefecture. It was established in 1958 and is based in Osaka. It is not listed on a stock exchange.
It failed after sales declined due to tough competition among electronics retailers. Wakodenki is currently undergoing rehabilitation with the aid of Yamada Denki Co.
